Savola Group (SAVOLA), a Saudi Arabian food producer, is among first-round bidders for Kuwait Food Co., the operator of KFC and Pizza Hut restaurants in the Middle East and North Africa, people with knowledge of the situation said.
Kuwait Food, which is known as Americana, is likely to fetch more than $4 billion, the people said, asking not to be identified discussing a private matter. The average offer for the business was about 3.5 Kuwaiti dinars per share, which would value the franchise operator at about 1.41 billion dinars ($5 billion), one of the people said.
Other potential suitors for the business include private-equity firms KKR & Co. and CVC Capital Partners Ltd., which have submitted a joint offer, and separate bids from Advent International Corp. and TPG Capital, the people said.
A representative for Savola Group could not immediately comment, while Americana officials in Kuwait didn’t immediately respond to a call and e-mail seeking comment. Spokesman for Advent, CVC and TPG declined to comment. KKR didn’t respond to a telephone and e-mail request for comment.
A potential transaction for Americana would be one of the largest leveraged buyout deals in the Middle East, where private equity activity is picking up on the back of economic growth and improving financial markets. TPG Capital and The Abraaj Group Ltd are seeking funding for the potential acquisition of Saudi fast-food chain Kudu, people familiar with the matter said June 10.
Americana, which is controlled by Kuwait’s Al-Kharafi family, was founded in 1964, and also manufactures produce including California Garden beans and Farm Frites frozen vegetables.
Americana reported sales of $3.1 billion last year and net income of $179 million, according to its annual report. The company employs more than 63,000 people in 13 countries.
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