$4bn Americana sale collapses

By Eliot Beer

- Last updated on GMT


Related tags Kuwait

The sale of Americana to investor consortium Adeptio will not proceed, both parties announced on Sunday, ending a transaction which could have been worth as much as US$4bn.

The Kuwait Food Company, more commonly known as Americana, made a formal statement through the Kuwaiti stock exchange, revealing the sale of the Al-Kharafi family’s 69% stake in the business – owned by their investment vehicle Al Khair – would not be proceeding.

Negotiations cancelled

Kuwait Food Co. (Americana) announced that both of Al Khair National for Stocks & Real Estate Co. and Adeptio Co. didn't agree upon buying Al Khair's share in [Americana]. So, all negotiations regarding this matter were cancelled​,” said the firm’s statement, with Al Khair releasing a similarly worded announcement.

An Adeptio spokesperson told Reuters the firms could not agree on mutually acceptable terms.

The floundering of the deal comes nearly four months after it was first announced​. Adeptio, representing a group of investors from the GCC, led by Mohamed Alabbar, chairman of Emaar Properties, originally said it would pay around US$1.7bn for the Al-Kharafi family’s stake at the start of February, valuing Americana at around US$2bn.

A month later, this valuation soared to US$4bn, according to sources speaking to Bloomberg, which would have represented a 36% premium on Americana’s share price at the time – and would potentially have seen Adeptio offer to buy all the company’s shares and take it private. Americana said it was not aware of this valuation, while Adeptio and Al Khair declined to comment.

What now for Americana?

With Adeptio’s bid now dead, the future of the sale of Americana is unclear. The firm went up for sale more than two years ago, initially amid rumours and secrecy – and the process has failed to run smoothly at almost any point.

While a number of bidders had been linked – correctly or not – with the sale, including Savola, Temasek, Brazil’s BRF, KKR and CVC Capital Partners, no-one managed to close a deal. By early 2015, Americana was forced to deny the talks were close to collapse​, with CVC – long rumoured to be the front-runner – pulling out of the race just weeks later.

Earlier in May, Americana announced a 12.3% year-on-year fall in its first quarter profits​, netting just over US$50m in the first three months of the year.

Americana is one of the largest food groups in the Middle East, operating franchises including KFC, Pizza Hut and TGI Fridays, and producing a wide range of frozen and grocery food products under brands such as Farm Frites, California Garden and Americana Meat. 

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