Burger King India in talks to acquire controlling stake in BK Indonesia

Burger King India has entered into discussions regarding acquisition of a controlling stake in PT Sari Burger Indonesia (BK Indonesia), which manages and operates Burger King brand in Indonesia, the company said in a stock exchange filing today.

The company has entered into a non-binding understanding with F&B Asia Venture (Singapore) Pte Ltd. F&B Asia, through its wholly owned subsidiary, currently holds an indirect equity interest of 65.79 per cent in BK Indonesia.

The company said BK Indonesia can be a good fit given its experience in managing and operating the “Burger King” brand in India. It realises the high growth potential in the Indonesian market and believes the company can be the right partner to drive the Burger King brand in Indonesia though its next phase of growth.

F&B Asia is also a member of the ‘promoter and promoter group’ of the company.

Burger King India, in response to an invitation for a non-binding offer from F&B Asia, had submitted a non-binding indicative proposal to F&B Asia, for the acquisition of controlling stake by way of a combination of primary and secondary transaction.

This means up to 85 per cent stake in BK Indonesia directly or indirectly, by way of a secondary purchase and a further primary investment of up to $40 million, at a premoney enterprise value of BK Indonesia at $183 million on a cash free and debt free basis.

The proposal, on a non-binding basis, has been accepted by F&B Asia earlier today. Accordingly, the parties are subject to an exclusivity period of 90 days to explore and negotiate the proposed transaction.

Burger King India had recorded a net loss of Rs 44.35 crore for the April-June quarter vs Rs 80.45 crore loss during the same quarter last year. The company stock closed Rs 170.65, up Rs 0.60 or 0.35 per cent, at the National Stock Exchange on Friday