[NEW YORK] Singapore's Temasek Holdings and a consortium that includes China Investment Corp and KKR & Co have advanced to a second round of bidding for a minority stake in Yum Brands China unit, people familiar with the matter told Reuters.
Another private equity-backed consortium has also moved to the second round, the people said, although its identity could not be immediately confirmed.
Louisville, Kentucky-based Yum Brands, owner of the Pizza Hut and KFC fast food chains, aims to spin off its 7,205 China restaurants by the end of 2016, amid pressure from activist investor Corvex Management, whose founder, Keith Meister, is on Yum's board.
The second round of bids for the stake of around 20 per cent are due by the end of this month, the people said, declining to be identified disclosing confidential information.
Yum's entire China unit is valued between US$8 billion and US$11 billion, based on its core earnings of about US$1 billion, the people added.
Some bidders are keen to buy control of the China business, the people said, but they noted that Yum is sticking to the minority sale because it is more tax efficient.
It was not clear if the bidders would pursue a transaction if Yum does not offer a controlling stake, they added.
In the latest quarter, Yum's China sales grew faster than Wall Street estimates, raising hopes that Yum's profit engine is showing signs of stability after battling many quarters of disappointing sales.
Temasek, a major global investor, and KKR declined to comment. China sovereign wealth fund CIC did not immediately respond to a request for comment.
A Yum spokeswoman said: "We continue to make good progress since we announced the transaction separating Yum and Yum China into powerful, independent, focused companies by the end of 2016."