JOLLIBEE FOODS CORP. on Tuesday said it plans to spin off its international business and list it on a US stock exchange by late 2027 as the Philippine fast-food group plots its global expansion.
Its stock jumped the most in more than five years after the announcement.
Jollibee, which increasingly is taking aim at global fast-food giants such as McDonald’s and Yum! Brands, Inc. from Los Angeles to Ho Chi Minh City, said it has hired international and local advisers to work on the spinoff and potential US listing.
Jollibee Foods Corp. International would include all of the company’s businesses outside its home market, the company said in a disclosure to the Philippine Stock Exchange, where its Philippine operations will remain listed.
Jollibee shares — after a one-hour trading halt — rose as much as 11.56%, the most since October 2020.
“Built on a capital-light model with significant whitespace for expansion, it is positioned to operate in markets that support companies pursuing international scale, innovation, and long-term global growth,” the company said.
“The transaction is intended to be executed in late 2027, subject to prevailing market conditions, completion of appropriate diligence and securing all required regulatory and legal approvals across relevant jurisdictions,” it added.
Establishing two listed businesses is meant to sharpen the strategic focus of each company and enhance the “clarity of each equity story,” Jollibee said.
The spinoff would let investors value the “stable, cash-generative Philippine business separately from the higher-growth but more volatile international operations,” COL Financial Group analyst Rachelle Biacora said in a note.
However, the company’s domestic unit might have a lower market value, which could affect its weighting in some stock indexes, she added.
Jollibee shareholders would receive a number of shares in the international business equal to their company holdings at the time of the listing, the company said.
Jollibee’s restructuring and spinoff of foreign operations is a novel way for a Philippine blue chip to list those units, allowing eligible shareholders “to capture the complete economics of the move,” Juan Paolo E. Colet, managing director at China Bank Capital Corp., said in a Viber message.
He added that spinning off and listing Jollibee Foods Corp. International would unlock full value in Jollibee’s international operations, with Jollibee Foods Corp. likely to see investor buzz over the international company’s valuation speculation.
“Jollibee Foods Corp. International will be seen as having a comparatively higher growth potential given the sheer size of the global consumer space, but that also comes with the associated higher risk of breaking into new markets,” Mr. Colet said.
“Meantime, Jollibee Foods Corp. will become a pure play on the Philippine food-service market where there is still room to refresh and grow a predominantly mature brand portfolio,” he added.
The food giant owns several brands, including its iconic Jollibee chain known for its sweet-style spaghetti and crispy fried chicken.
Jollibee is building its international profile, striking 27 cross-border deals worth about $1.1 billion since 2000, according to data compiled by Bloomberg. That includes US brands such as Smashburger and Coffee Bean and Tea Leaf, which Jollibee struggled to turn around, and recently, South Korea’s Compose Coffee.
The group had 10,304 stores as of September, 6,859 of which were located overseas across over 30 countries, including China, Canada and Vietnam. International business generated about 43% of Jollibee’s P224.2-billion ($3.8 billion) revenue from January to September. — Alexandria Grace C. Magno with Bloomberg News