Philippine corporation Jollibee Foods has abandoned its acquisition of Norang Tongdak. The negotiations appear to have broken down as both sides could not narrow their differences over the sale price.
According to investment banking (IB) industry sources on the 8th, Q Capital Partners and Koston Asia, which hold 100% equity in Norang Tongdak, has recently officially notified the Jollibee consortium (Elevation Equity Partners and Jollibee Foods) that they have ended negotiations.
The reason for the breakdown of negotiations is a difference in price perception. The sale price of Norang Tongdak is hovering around the mid-100 billion won range. It is reported that the Jollibee consortium requested a reduction of the price to the lower 100 billion won range after due diligence.
The Jollibee consortium has demanded a price reduction for the acquisition, stating that the performance of Norang Tongdak in the first half of this year has been different from expectations. They specifically cited that the cost surged due to disruptions in chicken imports caused by avian influenza (AI) in Brazil.
The selling side is also expected to consider selling the management rights of Norang Tongdak to another potential buyer in the future. Q Capital Partners and Koston Asia noted that "as a result, we have addressed supply and demand instability well, and this year's performance is expected to be higher than last year's," adding, "Since there are other interested acquirers, we plan to decide on the timing of the sale slowly."