KKR & Co. and sovereign fund China Investment Corp. are among potential suitors studying investments in Yum! Brands Inc.’s Chinese business, people with knowledge of the matter said.

Baring Private Equity Asia is also exploring a potential minority stake purchase, and the three funds may decide to team up for a joint investment, according to the people. Yum is considering the sale of a 20 percent holding in its Chinese business, which could value the unit at about $10 billion, the people said, asking not to be identified as the information is private.

Chinese private-equity firm Hopu Investment Management Co., led by dealmaker Fang Fenglei, is also considering a potential investment in Yum! China, though deliberations are at an early stage, one of the people said. Yum is not currently running a formal sale process and may decide to continue with its previously announced tax-free spinoff of the Chinese unit, the people said. 

Yum, the Louisville, Kentucky-based owner of the KFC and Taco Bell fast-food chains, in October bowed to activist-investor pressure and agreed to separate its China business from its U.S. operations. Hedge fund manager Keith Meister, a protege of billionaire Carl Icahn, said Yum’s Asian market could be better served with a more focused business.

Pizza Hut

Hony Capital Ltd., which bought U.K. restaurant chain Pizza Express in 2014, also expressed interest in purchasing a stake in Yum’s China operations, according to one of the people. Yum didn’t allow Hony Capital to proceed with talks, since the Beijing-based private-equity firm owns a competitor to its Pizza Hut chain, the person said.

A spokeswoman for Yum said the company continues to make “good progress” since it announced the separation of its China business. Yum will provide updates “at appropriate times,” she said, declining to comment further. 

Spokesmen for Baring and KKR declined to comment, while representatives for Hopu and Hony didn’t immediately answer phone calls seeking comment. CIC’s Beijing press office didn’t immediately respond to an e-mail seeking comment. The Wall Street Journal reported KKR’s interest in a minority stake in Yum China earlier, citing unidentified people.

Yum, which operates more than 7,100 restaurants across China, is expected to add 600 outlets in the world’s second-largest economy this year, according to its website. The China operations accounted for about 53 percent of Yum’s revenue last year, data compiled by Bloomberg show.

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