Yum Brands is in exclusive talks to sell its Pizza Hut chain to LongRange Capital. The deal could close in several weeks, though no agreement is guaranteed. LongRange beat out bidders including Sycamore Partners to enter exclusivity.
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Yum Brands picks LongRange for Pizza Hut, beating 2 bidders
Yum Brands entered exclusive talks to sell its Pizza Hut chain to LongRange Capital, people familiar with the matter said, in a deal that could reshape the company's brand portfolio.
"LongRange entered exclusivity with Yum in recent days, beating out bidders including Sycamore Partners," Bloomberg News reported Friday, citing people familiar with the matter.
The two parties are advancing discussions about a potential deal that could come together in several weeks, though there is no guarantee an agreement will be reached, according to the report. Yum Brands, LongRange Capital and Sycamore Partners did not immediately respond to requests for comment.
A sale of Pizza Hut would mark a significant strategic shift for Yum Brands, which also owns Taco Bell and KFC. The pizza chain, one of the largest globally by store count, has faced intensifying competition from Domino's and independent operators in recent years. For LongRange, acquiring an iconic brand with thousands of locations worldwide presents a turnaround opportunity in the competitive fast-food sector.
Yum Brands shares have gained about 10% this year through Thursday's close, outperforming the S&P 500's 7.5% advance, as investors rewarded the company's focus on its higher-growth Taco Bell concept. A divestiture of Pizza Hut could further re-rate the stock by removing a lower-margin asset from the portfolio, analysts have said.
The deal underscores a broader trend of private equity firms targeting established restaurant chains with real estate footprints and brand equity. LongRange, a private equity firm, would add Pizza Hut to a portfolio that includes investments in consumer and retail businesses.
This article is for informational purposes only and does not constitute investment advice.
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