Temasek Holdings has teamed up with Saudi Arabia's Savola Group to bid for Middle Eastern fast-food operator Kuwait Food Company, in a deal that could be valued at between US$4 billion (S$5.7 billion) and US$5 billion, according to two people with knowledge of the matter.
Talks between the three companies are ongoing and a deal could be reached before the end of the year, the people said, asking not to be identified as the information is private. JPMorgan Chase & Co is advising Savola, which has a market value of about US$8.5 billion, on the talks, the people said.
Savola had bid on its own to acquire Americana, as Kuwait Food is known, at the end of last year, people with knowledge of the matter said last December. A buyout group including KKR & Co and CVC Capital Partners also bid to acquire the Kuwaiti company after it began a sale process in middle of last year, the sources also said.
Americana was founded in 1964 and is the franchise operator of restaurants such as KFC, TGI Friday's Inc and Pizza Hut in the Middle East and North Africa region.
It also manufactures produce including California Garden beans and Farm Frites frozen vegetables.
The Al-Kharafi family, which has interests in the construction, telecommunications and financial sectors, owns 66.8 per cent of Americana, according to data by Bloomberg.
The company posted a net income of US$183 million for the fiscal year ending 2013, on sales of US$3.2 billion. The stock has dropped over the past month, erasing about US$1 billion from the company's market value.
Americana's share price rose 4.7 per cent to 2.24 Kuwaiti dinar yesterday morning in Kuwait City, while the Kuwait Stock Exchange Index was up 0.5 per cent.
Temasek has sought out consumer companies to broaden its investments and benefit from increasing disposable incomes. It completed the HK$44 billion (S$8 billion) purchase of a 25 per cent stake in Hong Kong-based Hutchison Whampoa's retail arm A. S. Watson & Co during the year through March 31.
Singapore's state-owned investment firm also singled out life sciences and agriculture among the top three industries it is backing.
Apart from A. S. Watson, it added assets in US pharmaceutical firm Gilead Sciences and Indian drugmaker Intas Pharmaceuticals.
Temasek is also in exclusive talks to buy the headquarters of Time Inc's British unit in a venture with Oxford Properties Group for about £465 million (S$1 billion), a person with knowledge of the matter said last month.
Temasek and JPMorgan declined to comment on the bid for Americana, while Savola and Americana did not immediately respond to calls and e-mails requesting comment.