Yum! takeover proposal approved
Updated: 2012-01-09 09:33
GUANGZHOU - Shareholders of China's leading domestic hot pot chain, Little Sheep Group Ltd (Little Sheep), have approved a takeover proposal by Yum! Brands Inc (Yum!), Yum! said in a press release on Friday.
Under the proposal, Yum! will offer Little Sheep independent shareholders HK$6.50 (83.7 cents) per share, and will offer holders of options to subscribe to Little Sheep HK$4.39 per option to cancel these options.
Yum! will proceed with its takeover process by seeking the sanction of the Grand Court of the Cayman Islands at a petition hearing on Jan 20.
The arrangement is expected to go into effect on Feb 1, when Little Sheep will be privatized and become a Yum! subsidiary, the press release said.
China's Ministry of Commerce in November 2011 approved Yum!'s proposed takeover of Little Sheep, which is listed in Hong Kong.
Louisville, Kentucky-based Yum!, which owns KFC and Pizza Hut, bought a 20-percent stake in Little Sheep in 2009 and raised its shareholding to 27.2 percent last year.
"We are pleased to see that the independent Little Sheep shareholders value the offer provided by Yum!," Jing-Shyh Sam Su, chairman and CEO of Yum! Restaurants China and vice president of Yum!, said in the press release.
Hot pot is a traditional Chinese meal that people enjoy by sitting around a fondue-like pot of simmering water, dipping raw foods, such as thinly-sliced meats, fish, vegetables, and noodles, into the water to cook. Hot pot is a signature New Year's dish for many Chinese families both in and outside of China.
"We have a strong commitment to the China market and to the Little Sheep brand. We are confident we can further strengthen Little Sheep's brand, business model and market position," he said.
The China Cuisine Association rated Yum! and Little Sheep as the top two market players in 2010.
Little Sheep, which focuses on hot pot, operates 3,000 restaurants throughout China and reports an annual revenue of 2 billion yuan ($315 million).
Meanwhile, Yum! has nearly 3,500 KFC restaurants and about 560 Pizza Hut restaurants in China. Last year, the company's China division reported 33.6 billion yuan in revenue.