Earlier this month sources with knowledge of the talks said negotiations were close to being halted, with none of the parties able to come to an agreement, according to Reuters. Three unnamed sources claimed bidders had failed to meet the price expectations of Americana’s main shareholders the Al Kharafi family, and said there was a difficult environment around the talks.
Americana pushes back
But last week Americana, formally known as Kuwait Food Co, released a statement on behalf of Al Khair National For Stocks and Real Estate Co, a management company for the Al Kharafi family’s businesses, stating negotiations were proceeding.
“Talks are still ongoing with several parties and we are still in the process of looking into our strategic options to evaluate our investments in Kuwait Food Co,” said the firm’s statement, adding it had not yet received a binding offer for Americana.
Private equity firms KKR and CVC Capital Partners are reported to be working together on a joint bid for Americana, and have been named as front-runners in the acquisition process. Saudi food giant Savola is also reported to be among the bidders, while Brazil’s BRF was forced to deny it was in the running to buy the Kuwaiti firm.
Months of uncertainty
News of the possible sale of Americana first surfaced in April, when the Al Kharafi family appointed investment bank Rothschild to advise on the process, although Americana denied reports of its possible sale for months. The Al Kharafi family owns 66.8% of Americana, which in total is worth around US$3.8bn according to its stock market valuation.
In November the firm announced a 33% rise in Q3 profits, and a profit of US$143.5m for the first nine months of the year, up 15% over the same period the year before. But despite the positive results Americana has seen falls in its share price in recent months, driven by uncertainty over its sale as well as general falls prompted by the lower price of oil.
Americana holds the Middle East franchises for prominent US brands such as KFC, TGI Fridays and Pizza Hut, among many others. It is also a major player in the Middle East food retail sector, with brands such as California Garden and Farm Frites, as well as its main Americana brand, under which it produces a wide range of frozen and packaged foods.