The Work

May 16, 2011 3:36 PM

Mayer Brown, Magic Circle Firms Advising on Yum's Little Sheep China Bid

Posted by Brian Baxter

Yum Brands, the world's largest fast food operator by number of locations, announced on Friday a formal bid for Chinese hot pot chain Little Sheep Group that values the target at more than $860 million, according to The Wall Street Journal.

Three firms, including Mayer Brown, have landed lead legal advisory roles on the deal. Yum is betting that China's huge population and rising income of its middle class will result in increased demand for fast food, The New York Times reports.

Robert Ashworth, the Asia managing partner at Magic Circle firm Freshfields Bruckhaus Deringer, is serving as primary Hong Kong counsel to Yum along with corporate counsel Edward Freeman. Louisville-based Yum owns the KFC, Pizza Hut, and Taco Bell chains. Yum put its Long John Silver's and A&W All-American Food brands up for sale earlier this year.

Yum turned to Mayer Brown corporate partners Frederick Thomas and David Schuette in Chicago for U.S. counsel on the deal. The firm previously handled several important matters for Yum, such as the company's acquisition of Long John Silver's and A&W, and negotiations for the naming and sponsorship rights for the new, 22,000-seat KFC Yum! Center in Louisville. Yum's general counsel is Christian Campbell.

Little Sheep was founded in 1999 in Baotou, a city in the inner Mongolian autonomous region of China, where hot pot--a stew of meat and vegetables--is a local delicacy. Since then Little Sheep has grown to almost 500 restaurants throughout China, Japan, Canada, and the United States.

Linklaters corporate partners Teresa Ma and Nicola Mayo in Shanghai are leading a team from the Magic Circle firm advising Little Sheep. Yum bought a 20 percent stake in the company in 2009 and increased its stake to 27.2 percent last year.

The WSJ reports that Yum would pay between $570.5 million to $586.3 million for the remaining two-thirds of Little Sheep it doesn't already own. Yum had announced a preliminary plan to buy Little Sheep in April but didn't spell out the terms of its offer.

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