BreadTalk Group Buys Over Food Junction For $80 Million
Ever visited a Food Junction outlet? Well, very soon, every stall inside every Food Junction outlet will be selling bread, cakes, pastries and puffs from BreadTalk.
Okay, we’re kidding. BreadTalk is buying over Food Junction, but obviously they aren’t going to turn every outlet into an emporium for their doughy products.
The amount – S$80 million – will be paid in cash. Considering that BreadTalk’s market value is about S$400 million, that buyout amount is quite sizeable.
The decision was reportedly made after BreadTalk considered the financials of Food Junction Management (FJM) and how useful having their network will be to their core business.
Food Junction now has 12 food courts in Singapore
FJM currently operates 11 food courts in Singapore:
- Bugis Junction
- Century Square
- Great World City
- HarbourFront Centre
- Junction 8
- Lot One Shoppers’ Mall
- NEX@Serangoon
- One Raffles Place
- Raffles City
- Rivervale Mall
- United Square
They also have 3 in Malaysia, with one more set to open next year at The Mall in Johor Bahru.
BreadTalk owns quite a number of food brands
Maybe you weren’t aware, but BreadTalk owns a number of food brands — Food Republic, Toast Box, Sō Ramen, Thye Moh Chan and The Icing Room.
They also have partnerships with big names like Din Tai Fung and Song Fa Bak Kut Teh, allowing the group to run franchises.
And of course, they have their legion of bread shops — which according to their website, numbers close to 1,000 outlets in 16 countries.
Purchase announced 2 weeks after CEO resigned
Announcement of the massive purchase comes just 2 weeks after BreadTalk CEO Henry Chu stepped down for personal and health reasons.
BreadTalk’s share price has fallen about 50% since its peak of $1.20 in the middle of 2018. According to their recent financial report, the bakery division made a loss for the first half of 2019. On the other hand, food atrium performance was strong, especially those in Hong Kong and China, reporting a 23.8% increase in pre-tax earnings.
This may be why they are deciding to acquire Food Junction — to bolster their business and perhaps mitigate investors’ fears of the CEO resigning.
Hopefully, this homegrown giant finds its footing again and leap to greater heights.
Featured image adapted from Food Junction and SG SME.
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