Burger King sale being renegotiated owing to Covid-19, says Grand Parade
The gaming and leisure company said in February it had agreed to sell Burger King SA to a private equity firm
Leisure and gaming company Grand Parade Investments (GPI) said on Thursday the terms of the sale of its SA Burger King licence was being renegotiated due to the Covid-19 pandemic.
The group had announced the sale in February, but said on Thursday that “as a result of the Covid-19 pandemic, the parties are renegotiating the terms and conditions of the disposal,” without going into further detail.
GPI said in December that it was seeking to offload the franchise for which it had paid about R700m.
The sale price in the offer from private equity fund Emerging Capital Partners (ECP) Africa Fund IV was based on Burger King SA’s enterprise value, or R670m based on a ratio of eight times forward earnings before interest, taxation, depreciation and amortisation (ebitda).
GPI would receive 95.36% of this, though in the determination of the sale price the debt of the enterprise will be subtracted and excess cash added.
The Grand Foods Meat Plant is accompanying the sale of Burger King SA and was valued at R27m.
In afternoon trade on Thursday, GPI’s share price was up 10.5% to R2.21, putting the group on track for its best one-day performance in almost to months. The group’s share price has fallen 37.75% so far in 2020.
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