(Yicai) May 26 -- Yum China Holdings has no comment to make on reports that the operator of Kentucky Fried Chicken and Pizza Hut restaurants in the Chinese mainland was not included in the second round of bidders for Jardine Matheson’s restaurant business, which has the franchises to the two fast-food chains in Hong Kong, Macau, and Taiwan, a source at the company told Yicai.

Jardine Matheson, a Hong Kong-based conglomerate, began exploring a potential sale of Jardine Restaurant Group last July, with Morgan Stanley advising, according to Mergermarket. Jardine Restaurant, which runs KFC and Pizza Hut across several Asia-Pacific markets as well as the self-developed PHD pizza brand in Hong Kong, has more than 1,000 outlets and 22,000 employees. 

Initial non-binding bids, which were due late last week, came from Yum China, private equity firms the Carlyle Group and EQT, and Taiwan-based food and beverage group Uni-President, both Mergermarket and LatePost reported. Three sources put the potential valuation at around USD500 million, with one adding that the Earnings Before Interest, Taxes, Depreciation, and Amortization multiple is estimated at about 10 to 12 times.

Yum China may face regulatory hurdles stemming from its business exposure in Taiwan, two sources told Mergermarket, with one adding that the Shanghai-based company had considered partnering with a private equity firm to co-invest to address the issue.

Jardine Matheson does not comment on market speculation and rumors, a spokesperson told Mergermarket, with EQT and Carlyle also declining to comment.

Washington-based Carlyle acquired the rights to operate KFC in Japan in 2024 and in South Korea last month.

Editor: Martin Kadiev