April 19, 2024

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[THE INVESTOR] South Korea’s IMM Private Equity has suspended its plan to sell its entire controlling stake in local coffee franchise Hollys Food and Beverage as it failed to narrow the price gap with potential buyers, according to industry sources on Dec. 2.

The private equity firm has been in the final round of negotiations with unnamed Chinese and Taiwanese investors over the sale of a 91.82 percent stake in Hollys F&B but they were unable to resolve their price dispute and other transaction conditions. 

Hollys Coffee CEO Shin Sang-chul

“For the time being, IMM will concentrate on boosting Hollys’ value and resume the sale process in the next two or three years,” a source familiar with the deal said.

IMM declined to comment.

Holllys F&B runs Hollys Coffee, a popular coffee chain with more than 500 stores nationwide.

A final decision on the buyer of the beverage firm was largely expected to be taken this week as IMM has been focused on negotiations with the two parties in the previous month.

In August, IMM and the sales manager Deutsche Bank shortlisted four-- Carlyle, Daesang Group and two parties.

IMM PE took over the food and beverage company in 2013 for 45 billion won (US$40.39 million) and has increased its stake to 91.82 percent with an additional 37 billion won investment.

Since the takeover, the chain has seen its sales surge 58.3 percent from 68.6 billion to 10.85 billion won last year.

By Park Han-na (hnpark@heraldcorp.com)