Private equity firm Everstone Capital is looking to offload its nearly 41% stake in Restaurant Brands Asia, formerly Burger King India, sources have told FE.
Two private equity firms, Advent and General Atlantic, are said to be in talks with Everstone for buying the latter’s stake in the company, persons in the know said.
There were reports that Jubilant FoodWorks is also in the fray to acquire the stake. However, when contacted, the company said the rumours are baseless.
Restaurant Brands Asia declined to comment when contacted. Advent and General Atlantic were not immediately available for comment.
Everstone’s stake (of 40.9%) is valued at nearly Rs 2,500 crore, based on Thursday’s closing price of Rs 122.40 apiece on the BSE. Jubilant FoodWorks, persons in the know said, is ahead of the Advent-General Atlantic consortium, in discussions for a possible acquisition in part because the buy will help fill gaps in its portfolio.
While the Domino’s Pizza and Dunkin Donuts operator is the largest fast-food player in India, it has no presence in burgers, a space dominated by Westlife FoodWorld, which runs McDonald’s restaurants in the west and south of India.
Restaurant Brands Asia, on Wednesday, reported a wider fourth quarter (Q4FY23) loss amid food inflationary pressures and expansion of business in India and Indonesia. Discretionary spends have been constrained over the last few quarters owing to inflationary pressures that consumers have been feeling, Sachin Bobade, vice president, research at Mumbai-based brokerage Dolat Capital, said.
On Wednesday, Jubilant FoodWorks and Devyani International, which runs KFC restaurants in India, had also reported weak numbers in Q4, Bobade said, amid slowdown concerns in discretionary categories.
During the March quarter, Domino’s, for instance, reported a decline of 0.6% in like-for-like sales, a first in at least seven quarters, sector experts said. The average daily sales, according to Jubilant FoodWorks’ investor presentation, stood at Rs 81,430 in Q4 of FY23 as against a high of Rs 86,945 in Q2 of FY23.
Restaurant Brands Asia, on the other hand, reported a 29% year-on-year rise in topline to Rs 514 crore in the March quarter, its results showed. But total expenses also increased by 29% in the same period versus last year, taking the sheen off topline growth, analysts tracking the company said.
The company now has 391 Burger King outlets in India, after having opened 88 restaurants and closing 12 in FY23. It plans on increasing the total number of Burger King stores to 450 by the end of the current financial year (FY24).