Saudi PIF shortlisted as bidder for stake in Starbucks Mideast – sources
2022.06.06 15:43
FILE PHOTO: A closed Starbucks cafe is seen at Dubai International Airport amid the outbreak of the coronavirus disease (COVID-19) in Dubai, UAE April 27, 2020. REUTERS/Ahmed Jadallah
By Hadeel Al Sayegh and Saeed Azhar
DUBAI (Reuters) – Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has been shortlisted to buy a stake in the Middle East, North Africa and central Asia Starbucks (NASDAQ:SBUX) franchise held by Alshaya Group, two sources told Reuters.
The Starbucks franchise in the region has several hundred outlets in 14 countries across the Middle East, Russia, and central Asia.
Kuwait-based Alshaya Group, the region’s leading brand franchise owner, last year hired JPMorgan (NYSE:JPM) to sell a significant minority stake in the business. The sources said it could sell up to 30%, generating $4 billion-$5 billion.
The PIF, which manages over $600 billion of assets, declined to comment. Alshaya did not immediately respond to a request for comment. JPMorgan also declined to comment.
The PIF is among the bidders that have made it to the next round as the sale process nears its final stages, the source said.
Several private equity bidders were also in the race, including CVC Capital Partners and Brookfield, but it was not immediately clear if they had been shortlisted.
Abu Dhabi state fund Mubadala Investment Co and Abu Dhabi state holding fund ADQ are no longer in the race, the two sources said. Mubadala declined to comment, while ADQ did not immediately respond to a request for comment.
The deal would widen the investor base of a business privately held by the Alshaya family since 1999, one of the sources said.
Some of the Middle East’s biggest privately-owned companies are warming to the idea of bringing in outside investors through listings or strategic stake sales.
Saudi Arabia has seen a spate of listings in recent years as the kingdom encourages more family-owned companies to float in a bid to deepen its capital markets under reforms aimed at reducing reliance on oil revenues.
The second source said funds raised could be used towards other businesses Alshaya owns, and that the valuation of the company is attractive, making the sale of a stake compelling.
The privately held Alshaya Group says it is the oldest company in Kuwait, first registered in 1890. It runs franchises including H&M, Mothercare, Debenhams, American Eagle Outfitters (NYSE:AEO) and Victoria’s Secret.
