KFC yesterday announced that its shareholders had approved the proposed privatization by Massive Equity SB (MESB) as well as the proposed warrant and capital repayment in its EGM held yesterday.

Shareholders say 'Yes'. To recap, MESB on 14 Dec 2011 proposed to privatize KFC. The disposal of the entire business and undertaking, including all the assets and liabilities of KFC to MESB at an aggregate cash consideration of RM4/share and RM1/warrant, will amount to RM3.2bn. The ultimate offerors for the deal are Johor Corp (JCorp), the Employees Provident Fund (EPF) and CVC Capital Partners (CVC).
In the extraordinary general meeting (EGM) held yesterday, 99.1% of KFC's shareholders voted in favour of Resolution 1, which is the proposed disposal of KFC, while 99.7% voted for Resolutions 2 and 3, which are the proposed payment of RM1 per warrant to KFC warrant holders and proposed capital repayment of RM4/share to ordinary shareholders, respectively.

Maintain NEUTRAL. The acquisition is expected to be completed by year-end and the board of directors has no intention to maintain KFC's listing status moving forward. Upon completion, KFC will undertake to return the cash proceeds arising from the disposal to shareholders and warrant holders via a capital repayment exercise and a warrant scheme respectively. Maintain NEUTRAL.

Source: OSK