Yum Brands in talks to facilitate merger of its two Indian partners, ET reports
Shares of Sapphire Foods rose 7.5% while Devyani was trading 2.8% higher as of 1:40 p.m. IST.
The development comes at a time when most fast food franchisees across India are struggling with a slowdown in same-store sales growth and margin expansion, as consumers reeling under high cost of living cut back on dining out and ordering in.
Sapphire reported a 6% sequential decline in KFC and 13% sequential decline in Pizza Hut's average daily sales for the quarter ended March, while Devyani's KFC same-store sales saw a decline of 6.1% in the fourth quarter year-on-year. However, its Pizza Hut same-store sales grew 1%.
The talks could see Sapphire Foods merge into Devyani International via a share swap, with Sapphire shareholders potentially receiving one Devyani share for every three held, the newspaper reported, citing one source.
The deal may involve Devyani acquiring Sapphire's KFC and Pizza Hut franchise rights, or consolidating all KFC franchisee stores in India under Devyani, the report added.
Devyani's market capitalization is at 211.4 billion rupees ($2.48 billion), while Sapphire's stood at 110.8 billion rupees, according to data from National Stock Exchange of India.
Devyani had more than 2,000 stores across its network in India, Thailand, Nigeria and Nepal, as of March 31. Sapphire had 836 KFC and Pizza Hut restaurants in India and 127 Pizza Hut and Taco Bell restaurants in Sri Lanka as of March end.
Devyani and Sapphire did not respond to requests for comment, while U.S.-based Yum Brands was not available for comment outside regular business hours.
($1 = 85.3580 Indian rupees)
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It's always hard, but we don't want to be a company that every quarter is laying people off… So, it is important for us to get done what we're doing in one big thing and then be done with it.' Network sources also noted that most people on the program, as well as CBS Evening News, are now waiting for Tom Cibrowski – the ABC News veteran who was brought in as president and executive editor of CBS News this past spring – to make changes to both shows now that the Paramount merger has been finalized. While the morning show has always been profitable for the network, those ad revenues have been decreasing this year due to the falling ratings – though sources tell The Independent that CBS Mornings is still turning a profit. Still, King's reported $10+ million annual salary would be an easy ledger item to cross off if the network decided not to renew her. 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