Sapphire Foods and Devyani International, the franchise partners of Yum! Brands, on Friday issued separate clarifications on the media reports suggesting a potential merger between the two companies.
“…In this regard, we wish to inform you that the company evaluates various strategic opportunities in the ordinary course, for growth and expansion of business. At this stage, there is no material event/information that requires disclosure under Regulation 30 of the SEBI Listing Regulations,” Sapphire Foods said in a regulatory filing.
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Further, Devyani International too maintained that there is “no material event that requires disclosure”. In a filing on the exchanges, it said, “In view of the above speculation, the company on its own considers it necessary to clarify to the Stock Exchanges that the Company evaluates various strategic opportunities in the ordinary course, for growth and expansion of its business with an objective of enhancing shareholders’ value.”
Earlier, a report by Economic Times had stated that Yum! Brands is mediating a merger between Devyani International and Sapphire Foods while exploring the possibility of merging the two partners into a single entity.
Devyani International and Sapphire Foods India currently operate KFC and Pizza Hut outlets in India as franchise partners of Yum! Brands.
According to the report, a part of this potential merger could see Devyani International acquiring all franchise rights for KFC and Pizza Hut currently held by Sapphire Foods. Alternatively, all KFC outlets across India might be consolidated under Devyani’s brand.
The proposed merger may involve a share swap ratio of 1:3, under which Sapphire Foods shareholders would get one Devyani International share for every three Sapphire Foods shares they own, the Economic Times report had stated.
Shares of Sapphire Foods were up 5.37 per cent at 4:00 pm today at a trading price of Rs 337.55. Meanwhile, Devyani International was up 3.5 per cent at a trading price of Rs 173.00.
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