Yum China: $17.6b private equity bid signals a bubble market

A huge offer for the fast-food chain operator is reminiscent of club deals in the 2006 to 2007 buyout boom — a salutary reminder on the 10th anniversary of the Global Financial Crisis.

An attempt by private equity funds to take down NYSE-listed Yum China is a red flag for investors as it shows the bidders were prepared to pay a lofty valuation, banks were ready to fund the ambitious deal and too many cooks were lined up to run the flagging business.

The consortium comprising Hillhouse Capital, Kohlberg Kravis Roberts, China’s sovereign wealth fund China Investment Corp. CIC and Baring Private Equity Asia made the $17.63 billion offer to management in July, according to two people close to the deal.

Yum China, best known as the operator of the KFC, Pizza Hut and Taco...

¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222