CVC in talks to buy China restaurant chain stake for $300 mln-sources

HONG KONG Tue Oct 29, 2013 9:56pm EDT

HONG KONG Oct 30 (Reuters) - Private equity firm CVC Capital Partners is in advanced talks to buy a majority stake in high-end China restaurant chain South Beauty Investment Co Ltd for around $300 million, two sources with knowledge of the matter told Reuters.

A deal to buy South Beauty, which sells mainly Sichuan cuisine, would be the latest private equity acquisition of a restaurant chain in China, as choppy public markets in Hong Kong and tighter credit conditions push company owners to exit through M&A deals.

Under the deal being discussed, CVC is buying 69 percent of South Beauty, while the restaurant chain's founder, Zhang Lan will own a 31 percent stake, Basis Point reported citing sources on Tuesday.

CVC has hired Bank of America Corp as an advisor, and the bank is arranging loan financing of $140 million to back the acquisition of Beijing-headquartered South Beauty, Basis Point reported.

Bank of America and CVC declined to comment. South Beauty did not reply to an email requesting comment. Sources declined to be identified as the discussions were confidential.