It was only a matter of time before he brought more parts of the food business under his control. And he did just that with his takeover of The Bistro Group (TBG), one of the country’s largest casual dining operators.
The plan was known months ago but it was only last week when the eye-popping purchase value of P8.7 billion was revealed.
Big picture
For investment banker Juan Paolo Colet, managing director at China Bank Capital, this latest acquisition signals something bigger for Chen’s group.
“Mr. Chen is making a bold but well-calculated bet on the restaurant business. He’s one of the best entrepreneurs around, so he clearly sees the long-term value of his family’s investment in TBG,” he told InsiderPH.
“There are also potential synergies with his other food-related businesses,” Colet explained.
He praised A. Soriano’s opportunistic asset flip with the sale of its minority stake to Chen’s group for a profit of about P300 million.
“This turned out to be a hedge fund-like move for Anscor. Less than a year after buying their TBG stake, they’re cashing out with a total annualized return of more than 25 percent on their investment,” Colet said.
IPO candidate?
Bounty Fresh operator Bounty Agro Ventures Inc., which was reportedly eyeing a $500-million initial public offering (IPO) in 2023 according to Bloomberg News, has since held off on its listing plans.
The Bistro Group could serve as Chen’s new path to go public.
“If all goes well, the family’s restaurant portfolio could be an IPO candidate once the stock market recovers,” Colet said.
“The acquisition shows confidence in the country’s consumer sector and economic prospects. It also tells us there are opportunities in the restaurant industry, so we might see more dealmaking in that space,” he added.
The long game
The Bistro Group was established in 1994 by businessman William Stelton with the opening of the first TGI Friday’s in Glorietta, Makati.
Over the next few years, it added brands such as Italianni’s, Fish & Co., and Bulgogi Brothers.
The group’s expansion gained momentum in 2014 with the entry of private equity firm Navegar, which helped grow its footprint from 53 stores across 9 concepts to over 200 locations and dozens of brands, including Denny’s, Buffalo Wild Wings, Las Flores, Olive Garden, and Morton’s The Steakhouse.
Thriving restaurant scene
Last year, The Bistro Group announced plans to open 100 more stores within the next five years, and Chen is expected to maintain this aggressive pace of expansion.
It’s a strong signal that the food and restaurant scene in the Philippines remains vibrant and full of growth opportunities.
“The acquisition shows confidence in the country's consumer sector and economic prospects. It also tells us there are opportunities in the restaurant industry, so we might see more dealmaking in that space,” Colet said.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
