Restaurant Brands announced yesterday that Mexican company Finaccess Capital, which controls franchised food outlets across Europe and China, wants to acquire up to 75% of the company at $9.45 per share, totalling $881.5million.
Forsyth Barr broker Suzanne Kinnaird said while the offer was a "surprise", it was a non-binding indicative approach, without the issue of a takeover notice.
"Any offer would be subject to Overseas Investment Office and Yum! Brands consent," she said.
Restaurant Brands operates KFC in New Zealand and Australia, Pizza Hut and Carl's Jr in New Zealand and Taco Bells in Hawaii. All are owned by Yum! Brands.
Finaccess interests include KFC, Pizza Hut, Burger King and Starbucks.
Restaurant Brands chief executive Russel Creedy said in a statement the company was in discussions with Finaccess with no guarantee an agreement would be reached.
As the price in the proposed offer was subject to any dividend paid by Restaurant Brands, the board had decided not to declare an interim dividend, but would reconsider that later.
Shareholders would be updated on the Finaccess offer "over the coming weeks", Mr Creedy said.
The $9.45 offer is a 24% premium on Restaurant Brands shares at $7.60 on Wednesday. After yesterday's announcement, they rose more than 14% to $8.69.
For its half year to September 10, Restaurant Brands' total group sales rose 11.6% to $431million, earnings before interest, tax, depreciation and amortisation (ebitda) rose by $5.8million to $69.2million and reported after-tax profit rose 7% to $20.4million.
The bulk of the increase was attributed to 13 KFC acquisitions in Australia, made in the second half of last financial year.
The company had provided full-year guidance of normalised profit between $43million and $45million, which Mrs Kinnaird said was slightly below Forsyth Barr's forecast of $46million.
Mrs Kinnaird said the reported 8% profit increase was driven by solid KFC performance in New Zealand and Australia, and the final ebitda was "in line" with Forsyth Barr forecasts.
Her expectation was for a 12c per share dividend.
"Restaurant Brands has put its interim dividend on hold until finalisation of any takeover offer."
She said the New Zealand KFC outlets achieved "steady margins" of 20.6%, above the company's target of 19%-20%.
The new-format Auckland KFC outlet in Fort St had "significantly outperformed expectations" and was the prototype for new city stores in New Zealand.
Of other New Zealand brands, she said it was a weak result from Pizza Hutt, on lower store numbers and with margin pressure from wage costs.
The recently sold Starbucks chain was slightly better than expected and while margins improved at the small Carl's Jr chain, that was not to the extent anticipated.
Restaurant Brands said settlement in the $4.4million sale of its 22-store Starbucks coffee chain was due later this month.
Mrs Kinnaird said KFC's performance in Australia was in line with expectations on steady margins and ebitda growth of more than 43%, largely reflecting the 13-store acquisition and opening of one new store.
In Hawaii, the growth driver for Taco Bell's $12.8million ebitda was the local currency, she said.
However, margin pressures remained for Pizza Hut in Hawaii. Rising labour costs and higher commodity prices reduced ebitda margins to just 3.5% and below expectations.
