Five days ago, Jollibee announced it was increasing its stake in private equity fund Titan Dining LP, the franchise holder of rhe Michelin-starred dimsum restaurant in Asia-Pacific from 60% to 85%.
Jollibee bought the additional 25 percent for 36.3 million Singaporean dollars (P1.3 billion). This is significantly lower than the 120 million Singaporean dollar-valuation (P4.3 billion) Tan Caktiong paid for 60 percent of Titan in 2019.
This means that in just a span of 12 months, Tim Howan’s valuation has dropped by 27.4 percent.
Jollibee can claim it got Tim Howan at a bargain but some Babblers look at it as a fire sale from Titan.
Babblers said this could imply that just like other restaurant chains, Tim Howan’s 40 franchise and company-owned outlets in Cambodia, Indonesia, Japan, Macau, Taiwan, Thailand, Vietnam, Australia and the Philippines were struggling due to the coronavirus.
Tim Howan might rebound strongly from the pandemic in the long term, but Jollibee has to absorb a bigger chunk of its new subsidiary in the near to medium term.
Tan Caktiong forked out $540 million for Smashburger (purchased in December 2018) and Coffee Bean & Tea Leaf Co. (purchased in July 2019) to expand its footprint in the US.
It remains to be seen whether the store closures and other cost cutting measures implemented during the pandemic would make Smashburger and Coffee Bean start making profits for Jollibee by 2021 as predicted by Tan Caktiong in the firm’s annual stockholders’ meeting in July.