South African Burger King Owner Gets Ready to Sell Other Assets
South African Burger King Owner Gets Ready to Sell Other Assets
The South African maker of the Whopper burger has agreed to sell its Burger King chain to Emerging Capital Partners LLC as it looks to spin off businesses and return cash to investors.
Shares of Grand Parade Investments Ltd. climbed the most since Oct. 25 after the company announced the 664-million-rand ($44 million) sale to the Washington-based pan-African private-equity firm.
Grand Parade, which also owns casinos and a stake in South African steakhouse Spur Corp., is looking to sell its remaining businesses in the next few years, Chief Investment Officer Mohsin Tajbhai said by phone. Once it’s sold its assets, the Cape Town-based leisure company plans to delist from Johannesburg’s stock exchange.
“Grand Parade has historically traded at a significant discount to the value of its underlying assets,” Tajbhai said. “Our focus is on maximizing value for our shareholders, many of whom have been with us from inception.”
Pressure from investors for holding companies to unlock value has been gathering pace. Some major South African groups, including RMB Holdings Ltd., Old Mutual Ltd. and Naspers Ltd. have sought to reorganize in a bid to achieve better value for their assets.
The sale of Burger King South Africa and the Grand Foods Meat plant to ECP Africa Fund IV comes after Grand Parade closed 12 unprofitable Burger King restaurants in the last year and a half. It also opened 20 outlets in better placed locations during that time, bringing its Burger King chain to 91 eateries.
Dunkin’ Donuts
The acquisition adds to other purchases by ECP across the continent, where it has operations in Nairobi, Abidjan and Johannesburg, including the purchase of Kenya’s Artcaffe Coffee & Bakery in 2018. ECP has made about 60 deals in Africa over the past 19 years in 44 African countries, according to its website.
As the company that owned Dunkin’ Brands Group Inc.’s local Dunkin’ Donuts chain and Baskin-Robbins ice cream stores, Grand Parade applied for voluntary liquidation of the units a year ago. Grand Parade said at the time it made the decision to focus on its Burger King restaurants and after an unsuccessful effort to sell the two unprofitable brands. In June, Grand Parade sold a large chunk of its stake in Spur and used the proceeds to cut debt.
Its remaining 9% stake in Spur is “probably the easiest asset to sell” and that process has started, Tajbhai said. The company also has “valuable and saleable assets” in SunWest and Worcester casinos, catering equipment business Mac Brothers and its property portfolio, he said.
The shares climbed 9.1% to 3.60 rand as of 9:48 a.m. in Johannesburg, the highest level since Dec. 11. Spur slid 2.2%.
To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Vernon Wessels, Hilton Shone
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