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Malaysia’s QSR Brands puts $500 million IPO on hold


Malaysia’s biggest fast-food operator, QSR Brands, has shelved plans for an initial public offering (IPO) that could have raised as much as $500 million as potential local investors balked at its valuations, people familiar with the deal said.

QSR, the sole KFC restaurants franchise operator in Malaysia, Singapore, Brunei and Cambodia, had marketed the IPO to funds as anchor shareholders in the last few weeks. But they said the roughly 25 times forward earnings multiple being pitched was steep, said two of the people, adding that sluggish markets also impacted the offering. There was investor demand for roughly 20 times valuation, the people told Reuters said but QSR and its shareholders decided to defer the IPO.

Another person said the company’s weak first-quarter results following a price increase, had concerned some investors on its growth prospects and valuations.

“Investors have done their homework and crunched some numbers and don’t think the valuations are acceptable for them. The valuation gap is too wide,” said another source.

QSR had planned to launch its IPO this quarter and as early as next month, said the people, who declined to be identified as news of the IPO being shelved is not public.

After the Reuters story was published, QSR, which is backed by the investment arm of Malaysia’s Johor state and private equity firm CVC, said it had changed the timing of the IPO. In a short statement, QSR said the company and its shareholders “have decided to re-time the IPO following discussions with its bankers,” but did not provide any details.