Famous Brands Rises on Nigerian Purchase: Johannesburg Mover
Famous Brands Ltd. (FBR), a Johannesburg-based fast-food chain owner, rose the most in two weeks after saying it bought a 49 percent stake in a Nigerian company with the biggest African food franchise brand outside South Africa.
The stock, the sixth-best performer on the 62-member FTSE/JSE Africa Small-Cap Index this year, surged as much as 2.4 percent, the biggest jump since Sept. 2 on an intraday basis, and was 1.5 percent higher at 99.96 rand by 1:14 p.m. in Johannesburg. About 181,000 shares traded, or 1.2 times the three-month daily average. Famous Brands will buy the stake in UAC Restaurants Ltd., which owns Mr Bigg’s, from UAC of Nigeria Plc, the company said in a statement today.
“Historically, one of the key challenges of expanding into the rest of Africa has been to source suitable local partners,” Kevin Hedderwick, chief executive officer of Famous Brands, said in the statement. “This acquisition surmounts that obstacle.”
The company, which has Wimpy restaurants and Mugg & Bean cafes among its brands, has a market value of 9.9 billion rand ($1 billion). It plans to open 55 outlets outside South Africa as sales growth elsewhere on the continent beats the local market, Hedderwick said by phone on May 27. Sales on a like-for-like basis in the year through February jumped 28 percent in those markets, which now account for 7.3 percent of revenue.
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