Grand Parade agrees to new offer for Burger King after Covid-19 hit
Covid-19 has shaved off about R100m off the value of Burger King, which Grand Parade had said in December it wanted to sell
Leisure and gaming company Grand Parade Investments (GPI) said on Wednesday it had renegotiated the terms of the sale of its SA Burger King licence, after Covid-19 wiped off about R100m in value.
The new sales terms are based on an enterprise value for Burger King of R570m, from R670m when it announced an agreement in February.
The group had said in May that “as a result of the Covid-19 pandemic, the parties are renegotiating the terms and conditions of the disposal”.
GPI said in December that it was seeking to offload the franchise for which it had paid about R700m.
As of February, 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. This plant is now valued at R23m.
In morning trade on Wednesday, Grand Parade’s share was up 1.32% to R2.30, having fallen 35.21% so far in 2020.
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