Restaurant chain Quanjude insists top reshuffle is unrelated to McDonald’s bidding
Iconic Peking duck restaurant says exit of four directors will not have any major impact on the Chinese company’s operation
Quanjude, China’s iconic Peking duck restaurant chain, has dismissed market speculation claiming the recent resignation of four top executives was related to the bidding for McDonald’s Corp’s licensing rights in China.
Beijing Tourism Group (BTG) is Quanjude’s controlling shareholder, with a 42.67 per cent stake in the business.
It joined hands last month with mainland conglomerate Sanpower Group to submit a joint bid for McDonald’s Hong Kong and China businesses.
But Quanjude said in a filing to the Shenzhen Stock Exchange on Tuesday afternoon, the company “has not participated in the matters reported by some media”.
“It has not received notice from its controlling shareholder Beijing Tourism Group regarding any plans that may involve the listed unit.”
“The resignations by some directors and senior managers is a normal personnel reshuffle,” the filing said.
“It is not a group resignation and will not have any major impact on the company’s operation.”
Sources close to the deal suggest McDonald’s has received more than half a dozen bids, that could fetch up to US$3 billion, according to a Reuters report.
Quanjude said in a filing on Monday to the Shenzhen bourse that its chairman, general manager, board secretary and a board member had offered to resign. Its most-recent annual report shows three of their terms of office last until end of 2018.
That move by Quanjude prompted media speculation on whether a new management team with more acquisition and merger experience would add strength to BTG’s bid for the McDonald’s franchise.
Although Quanjude’s filing on Tuesday denied any correlation between the management reshuffle and the bidding for McDonald’s, industry insiders say the possibility still exists that Quanjude may be restructured, by incorporating a western brand to transform its old-school image.
“‘Old makes good with new angle’ is an interesting story. No more corrupt ducks, just fat chickens,” said one Hong Kong based M&A adviser.
“Its real enemy is probably KFC, and the upcomers in China such as Dico’s.”
Quanjude has long been a leading high-end restaurant brand in China, with Peking-style roast duck its signature dish.
But the company suffered a major setback in 2013, after China’s anti-corruption campaign and a cut in public spending resulted in a sharp drop in income for the chain.
Since then Quanjude has been working on transforming its style, to cater to more individual consumers to improve earnings.
Its 2015 annual report showed annual revenue edged higher by 0.39 per cent to 1.85 billion yuan. Net profit rose 4.48 per cent to 131 million yuan.