By Yantoultra Ngui and Neil Jerome Morales
SINGAPORE/MANILA (Reuters) - Udenna Corp, controlled by a close associate of former Philippine president Rodrigo Duterte, is exploring the sale of its Conti's Bakeshop and Restaurant and Wendy's fast-food chain businesses in the country, five sources told Reuters.
The Philippine petroleum-to-education conglomerate is in talks with at least one financial adviser on potentially selling both businesses together, three of the sources with direct knowledge of the matter said.
The deal could fetch as much as $200 million for the two assets combined, two of the sources added. The sources declined to be identified as they were not authorized to speak to the media. Udenna owns Wendy's and Conti's through its food subsidiary Eight-8-Ate Holdings, according to its website. "We are always exploring opportunities available that would be beneficial for the group," a Udenna spokesperson told Reuters on Wednesday. The Philippines' economy grew 7.4% in the second quarter from a year ago, the second fastest in Southeast Asia for the period trailing only Vietnam, following the easing of lengthy COVID-19 restrictions. Tycoon Dennis Uy, a close associate and the top campaign donor of Duterte, founded Udenna in 2002. It bought a 70% stake in Conti's in 2018 for an undisclosed sum, according to its website. A year later, it acquired all of Wendy's restaurants in the Philippines, becoming the master franchisee of the fast-food chain in the country. It did not provide financial details on the purchase. Conti's owns 70 stores in the Philippines. Its founding owners hold a minority stake in the company. Wendy's has 52 stores in the Philippines, mainly in the capital.
Uy's rapid, debt-fueled business expansion started when Duterte took office in 2016, but revenues declined significantly during the pandemic. The company has long insisted it received no preferential treatment under Duterte.
Amid deep losses, Uy had to resort to selling his assets, including a stake in the Philippines’ major gas field in the South China Sea.
(Reporting by Yantoultra Ngui in Singapore and Neil Jerome Morales in Manila; Editing by Kim Coghill)