MANILA, Philippines – Jollibee Foods Corporation, the country's largest fast food chain, is reportedly in talks with British sandwich chain Pret a Manger for a possible takeover, a deal that could cost over $1 billion.
Reuters, citing sources, said in an exclusive report that Jollibee had been holding talks with an advisor over an offer for Pret, best known for its sandwiches, salads, and organic coffee.
The food empire of Tony Tan Caktiong has yet to clarify the matter to the Philippine Stock Exchange.
Reuters quoted its sources as saying that Jollibee's offer could value Pret above $1 billion, based on its 2016 core profit of just over 93 million pounds.
Its website showed that Pret has over 350 stores worldwide, with presence in the United Kingdom, United States, Paris, Hong Kong, and Shanghai. It serves more than 300,000 customers daily.
This is in line with the fast food giant's attempt to conquer foreign markets, which Jollibee has had modest success in compared to its local sales. (READ: Jollibee to continue stinging McDonald's despite labor issues)
In April to June this year, the homegrown brand grew 18.1%, as sales increased despite the lack of election season demand.
Net income attributable to shareholders jumped to P1.96 billion in the 2nd quarter of the year, from P1.66 billion during the same period in 2016.
This brought Jollibee's net income in the 1st half of 2017 to P3.50 billion, from P3.05 billion a year ago.
Acquisition binge abroad
The Jollibee group has only 616 foreign branches, compared to its 2,643 stores here in the country, its 2016 annual report showed.
To eat a larger pie of the foreign market, the Tan Caktiong-led company has been investing in several foreign restaurants that are leading in terms of market share.
Its latest venture is to amend its agreement with Smashburger Master, to acquire an additional 45% stake in Smashburger starting 2018.
It was in October 2015 when Jollibee completed the acquisition of 40% in Smashburger for $99 million. The purchase allowed the chain to boost its US presence.
Acquiring a larger stake in Smashburger will allow Jollibee to benefit from Americans' increasing appetite for upmarket fast food chains.
For 2017, Jollibee plans to open more than 300 stores both here and abroad. – Rappler.com