Thursday, December 15, 2011

RHB Research: Takeover offer for KFCH, QSR fair

KUALA LUMPUR (Dec 15): RHB Research Institute said the prices offered by Johor Corporation and CVC Capital Partners Asia III Ltd in their takeover offer'' for QSR Brands and KFC Holdings seemed fair.

On Wednesday, JCorp and CVC via Massive Equity Sdn Bhd (MESB) offered RM6.80 for the QSR shares and RM3.79 for the warrants. At RM6.80, this is 80 sen above the closing price of RM6 on Tuesday while the offer price for the warrants was a premium of 77 sen from the closing price of RM3.02.

They also made an offer to KFCH of RM4 per share and RM1 per warrant. At RM4, this was 59 sen above the closing price of RM3.41 on Tuesday but five sen below the closing price of RM1.05.

MESB is a a special purpose vehicle owned by JCorp (51%) and CVC Capital (49%). The offer would remain open for acceptance until Dec 21, after which the offer would be withdrawn.

'Takeover valuations for both companies seem fair. Given that the buyers include JCorp (KFCH and QSR's ultimate owners), we believe the deal will most likely go through.

'We thus revise our call on KFCH to Trading Buy (from outperform) with a new fair value of RM4 a share, which represents the offer price of KFCH's assets and liabilities,' it said.

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