Burger King's China Franchisee Hires Citi For Stake Sale - Sources

By Dave Simpson
Burger King's China Franchisee Hires Citi For Stake Sale - Sources

Tab Food Investments (TFI), the biggest worldwide franchisee of Burger King, has asked Citigroup to help to sell a minority stake in the business in China and Turkey, a deal which could fetch at least $200 million, two sources familiar with the matter have said.

Istanbul-based TFI, founded by the Kurdoglu family, operates nearly 1,700 Burger King outlets in Turkey and China. TFI began investing 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.

Last year, the company, which is also a franchisee of fast-food chicken chain Popeyes Louisiana Kitchen and pizza brand Sbarro, postponed plans for a $220-million initial public offering in New York amid market jitters.

TFI wants the value of the potential stake sale to imply an enterprise value of about $1 billion, the sources said.

First-round indicative bids will be due by the end of next week, one source, who declined to be named as the information was not public, said.


TFI is seeking new partners to help speed up growth in China through new restaurant openings, 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 as early as next year.

TFI made about $70 million in earnings before interest, tax, depreciation and amortisation last year. Its 2019 EBITDA is expected to be about $90 million, one of the sources said.

TFI said its China and Turkey 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 declined to comment.


Burger King's major rivals include KFC, Pizza Hut and Taco Bell brands in China, for which exclusive licences are held by Yum China, a Yum Brands spin-off.

McDonald's Corp sold the bulk of its China business to state-backed conglomerate CITIC Ltd and private equity giant Carlyle Group in 2017.

Other Owners

TFI's China business is also part-owned by private equity firm Cartesian Capital Group and Restaurant Brands International, the owner of Burger King itself.

They own 50%, 22.5% and 27.5% of the China business, respectively, according to the IPO prospectus TFI filed with the US Securities and Exchange Commission last year.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.