Johnny Lee writes:

The Restaurant Brands saga is nearly over, with the takeover offer from Finaccess approaching the 90 percent threshold. The most recent declaration from Finaccess confirmed 89.3 percent ownership.

To recap, Restaurant Brands is a long-standing NZX company that owns the rights to several well-known takeaway franchises, including KFC, Pizza Hut, Carl’s Junior, and Taco Bell.

The company first listed in 1997, issuing 85 million shares at $2.20 each. The final takeover price of $5.05 marks the end of its 28-year run on the exchange. During that time, shareholders received substantial dividends, including the occasional “in-kind” payment – Restaurant Brands was once known for including food vouchers with its dividends.

The company’s trajectory changed in 2019, when Mexico-based Finaccess launched a partial takeover for 75 percent of the shares at $9.45. Partial takeovers are rare, and Finaccess justified it by saying that “by remaining a public company, Restaurant Brands will have access to capital to fund future growth.”

Soon after, Finaccess appointed Jose Pares, Emilio Botella, Luis Alvarez and Carlos Gonzalez to the board, with Pares becoming chair. Three of the four were Finaccess representatives, while Botella was linked to a Finaccess subsidiary.

Aside from the COVID-19 dip in 2020, Restaurant Brands’ share price remained strong for several years. But the high-inflation period that followed COVID squeezed margins and slowed growth, sending the share price tumbling from $15 to $4. Finaccess then returned with an offer to buy the remainder of the company.

Clearly, Finaccess sees value in waiting for a recovery. The independent directors, however, argued that the $5.05 offer undervalued the company. An Independent Adviser’s Report placed fair value at $5.72 per share but, despite this, directors still recommended shareholders accept $5.05. Their reasoning was that minority shareholders would face significant liquidity risks if the company remained listed with Finaccess below 90 percent ownership. Few buyers would remain, leaving investors effectively stranded.

This contrasts with the Millennium & Copthorne Hotels takeover attempt earlier this year. CDL Hotels, the largest shareholder, reached 83.7 percent ownership – short of the 90 percent threshold – but chose to waive the minimum and keep the company listed. Millennium & Copthorne still trades today in small volumes around the offer price of $2.80. CDL has said it will not make another offer until next year.

These examples highlight the risks of investing in companies dominated by a single shareholder. When one group controls the company’s future, smaller shareholders must ensure their goals and risk tolerance align with those of the major owner – and accept that outside takeover bids are unlikely to succeed unless the controlling shareholder also wants to sell.

If Finaccess reaches 90 percent, Restaurant Brands will delist, ending its long history on the NZX. While the $5.05 offer may not represent full value, independent directors agreed it was the most practical outcome for shareholders.

New Zealand has several other companies with major shareholders. Briscoes, majority-owned by Rod Duke, has been a rare example of success, with reliable dividends and a resilient share price. Synlait’s shareholders handed control to Bright Dairy and a2 Milk in 2024 in exchange for new capital – and its minority holders have seen partial recovery since. AFT Pharmaceuticals, Delegat Group, and Winton Land are also majority-controlled, while many electricity generators remain government-owned.

Major ownership is neither inherently good nor bad. It simply means retail shareholders must recognise that decisions will reflect the controlling owner’s priorities – not necessarily their own.

If completed, the Restaurant Brands delisting will add to an already long list of departures from the NZX. In the past two years, Arvida, Marlborough Wine Estates, Good Spirits Hospitality, Cannasouth, New Zealand Oil & Gas, GEO, Just Life, MHM Automation, Geneva Finance, New Zealand Windfarms, Marsden Maritime Holdings, Manawa Energy, Vital Limited, Smartpay and Greenfern have all left the exchange.

Some takeovers remain active. Both Bremworth (formerly Cavalier) and Comvita are currently fielding approaches.

On a brighter note, Uvre and Manuka Resources have listed, while Santana Minerals completed its dual-listing last year.

The ongoing loss of listed companies has drawn plenty of debate – with fingers pointed at the NZX, FMA, KiwiSaver managers, and financial advisers. Others blame listing costs, disclosure rules, and competition from private equity or the ASX. For smaller firms, delisting often makes sense – reducing compliance costs – while other funding paths like crowdfunding and venture capital remain available.

Past efforts such as the NXT and NZAX boards – designed for smaller issuers – failed to attract enough listings and were merged into the main board. Most recent departures have been small or mid-cap firms, with overseas buyers often willing to pay more than local investors. Perhaps 2026 will bring a reversal of this trend and some new opportunities for New Zealand investors.

Santana Minerals published its quarterly report on Friday, covering July–September. It confirmed that in October the company began submitting its Fast Track Approval application to the EPA, including the $390,000 application fee. Chris will discuss next steps in Thursday’s Taking Stock.

Travel

12 November – Levin – David Colman13 November – Whanganui – David Colman14 November – New Plymouth – David Colman20 November – Havelock North – Edward Lee

Chris Lee & Partners Ltd