- Yum China, Yum Brands' (NYSE:YUM) business there, announces a $460M investment by China-based global private equity outfit Primavera Capital Group and online and mobile financial services firm Ant Financial Services Group. The investment is concurrent with the completion of the spinoff of Yum China from the parent.
- Under the terms of the agreements, Primavera and Ant Financial will invest $410M and $50M, respectively. The final number of shares issued to both will be subject to a post-closing adjustment that will establish the effective price at an 8% discount from Yum China's volume-weighted average trading price commencing 31 days post spinoff and ending 60 days post spin off. Both investors will also receive two tranches of five-year warrants to purchase common shares representing ~2% ownership stake in each tranche. The strike prices will correlate to equity values of $12B and $15B, respectively.
- The spinoff and finalization of the investment should happen on October 31.Yum China will begin trading on the NYSE as a separate entity on November 1 under the symbol "YUMC."
- Primavera founder Dr. Fred Hu will serve as Non-Executive Chairman of Yum China.