HONGKONG/ISTANBUL: Tab Food Investments (TFI), the largest global franchisee of Burger King, has outsourced Citigroup to help auction a minority stake in the business in China and Turkey. The deal could earn at least $200 million, according to sources close to the matter.
Istanbul-based TFI, founded by the Kurdoglu family, operates close to 1,700 Burger King outlets in Turkey and China. TFI officially opened branches in China in 2012 and now has a network of more than 1,000 Burger King restaurants in over 150 Chinese cities, according to its website.
TFI, also a franchisee of fast-food chicken chain Popeyes Louisiana Kitchen and pizza brand Sbarro, in 2018 postponed plans for a $220 million initial public offering in New York amid market tensions.
The company wants the value of the possible stake sale to represent an enterprise value of about $1 billion, according to the sources.
First phase indicative bids will be due by the end of next week, one source, who declined be revealed as the information was confidential, said.
TFI is looking for new partners to fast-track growth in China through new outlets opening, food-delivery services and digital transformation, the source said.
The source also said that TFI was considering listing its businesses in China and Turkey, or only the China franchise, in Hong Kong starting 2020.
The company made approximately $70 million in earnings before interest, tax, depreciation and amortization in 2018. Its 2019 EBITDA is expected to be around $90 million, one of the sources remarked.
TFI said its Turkey and China operations continue to attract the attention of potential investors.
“In the current period, there is an increasing investor interest in our company,” Burcu Bati, TFI’s chief financial officer, told Reuters in an emailed statement.
“TFI is always open to evaluate strategic options that would be in the best interest of the company.”
Citigroup refused to comment.
Burger King’s main rivals include KFC, Taco Bell and Pizza Hut brands in China, for which exclusive licenses are held by Yum China, a Yum Brands spin-off.
TFI’s China enterprise is also partly-owned by private equity firm Cartesian Capital Group and Restaurant Brands International, the sole owner of Burger King. The combined ownership of the China business is in the form of 50%, 22.5% and 27.5% respectively, according to the IPO prospectus TFI filed with the U.S. Securities and Exchange Commission last year.