이 기사는 2020년 03월 31일 08시00분 thebell에 표출된 기사입니다

The race for Outback Steakhouse Korea is about to unfold as SkyLake Investment, the largest shareholder in the restaurant chain, is expected to send a teaser letter as early as this week.

South Korea’s SkyLake Investment and Credit Suisse, which is advising on the sale process, will send a teaser letter to potential buyers as early as this week, sources familiar with the matter said on March 26.

They initially planned to start a sale process at the beginning of March, but postponed it in response to the spread of the coronavirus in the country. With a tease letter sent in a few days and a picture of potential buyers expected to become clearer next month, the first round of bidding will likely take place in May.

The timing also coincides with Outback Steakhouse Korea’s shareholders meeting, which will be held this week. SkyLake is likely to take this opportunity to make the sale plan public after the financial statements for the last fiscal year are approved by shareholders.

SkyLake acquired 100 percent of the restaurant chain from Nasdaq-listed Bloomin' Brands Inc. for about 57 billion won in 2016. Its stake has since been slightly diluted after the company’s existing management exercised stock options.

For the past months, the PE firm has tapped potential bidders for Outback Steakhouse Korea, which has been named as a possible candidate for sale since last year. Currently, several strategic and financial investors are reportedly waiting for an official invitation from the seller.

Attracting the attention of industry watchers is whether Outback Steakhouse Korea will receive sufficient interest to press ahead with an auction process, as the food service industry has been negatively impacted by headwinds such as rising labor cost and a slowing economy. Moreover, with economic uncertainty perpetuated by the coronavirus, some industry watchers are skeptical about whether the restaurant chain can be sold at a proper price.

SkyLake is expected to tout Outback Steakhouse Korea’s competitive edge over rivals in terms of profitability and brand awareness. “From what I understand, Outback’s earnings performance has improved significantly last year,” an industry insider said. “It seems to be difficult for food service companies to attract strong interest from potential investors in the current environment, but there is room for a positive reaction to Outback given its increasing cash flow.”

Indeed, Outback Steakhouse Korea has seen continued growth under SkyLake’s ownership. Its EBITDA increased to 26.5 billion won in 2019, with an average annual growth rate of 50 percent for the last three years. Its position as a global brand in the food service industry also makes itself more attractive to potential bidders.

SkyLake recently completed a second recapitalization of the restaurant chain, bringing the total amount earned through recapitalization and dividends to more than 100 billion won. The firm is reportedly seeking a valuation of about 250 billion won.

(By reporters Kim Hye-ran and Kim Byung-yoon)