Starbucks Invites Shortlist To Bid For Stake In Its China Business – CoffeeTalk

Starbucks has invited a short-listed group of potential bidders to submit non-binding bids for a stake in its China business within the next two weeks. The U.S. coffee shop chain invited interested parties including private equity firms Carlyle, EQT, Hillhouse Investment, and Primavera Capital to attend management presentations where it would disclose financial and operational details of its China business. Other potential bidders include Bain Capital, KKR & Co, and technology major Tencent.

Starbucks’ market share in China has more than halved in the past five years, as low-price local rivals grow apace and consumers become increasingly cost-conscious in a stuttering economy. In May this year, Starbucks began the sale by inviting interested parties to answer questions about their businesses by late June. The Seattle-based company said at the time it was not considering a full sale of the business, which bidders expect will be valued at up to $10 billion.

In July, it selected up to 10 interested parties and signed non-disclosure agreements ahead of granting potential access to financial and operational figures. Starbucks has yet to finalize the structure of the sale or size of the stake. The cafe chain has held informal talks with a range of potential buyers since the second half of last year and aims to reach a deal by year-end.

Starbucks is pursuing the sale after reporting strong overall revenue for the three months through June 29 under a turnaround plan implemented after several quarters of falling earnings. Net revenue rose 3.8% to $9.46 billion, slightly exceeding the average analyst estimate, though same-store sales fell for a sixth consecutive quarter, by 2%. Starbucks’ market share in the world’s second-largest economy was 14% last year versus 34% in 2019, according to Euromonitor International data.

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