PAG Takes 70.92% Controlling Stake in Fengxiang Food for HK$1.5 Billion

This is an English adaptation of a FoodBud historical article originally published on November 8, 2022.

Fengxiang Food recently announced that it had received an acquisition offer from PAG. Falcon Holding LP, a vehicle under PAG, acquired the former controlling shareholder's 70.92% stake through an auction platform.

The transaction involved 992 million domestic shares, with total consideration of RMB1.37 billion, or about HK$1.5 billion. The price implied RMB1.5132 per share.

PAG's Foodservice Exposure

PAG, one of Asia's largest independent alternative investment managers, filed for a Hong Kong Stock Exchange main-board listing in March 2022. Earlier public reports said the offering could raise as much as US$2 billion, potentially making it Hong Kong's largest IPO of the year.

According to its prospectus, PAG's business was organized into three segments: credit and markets, private equity, and real estate. As of the end of 2021, the company had more than US$47 billion in assets under management:

• Credit and markets: 45%, about US$21 billion
• Private equity: 19%, about US$17 billion
• Real estate: 36%, about US$9 billion

In the prospectus, PAG disclosed several foodservice-related investments, including The Cheesecake Shop, Craveable Brands, Nayuki, and %Arabica.

PAG also invested in Singapore-based Paradise Group in 2016. In 2020, it became a shareholder of Silver Crest Acquisition Corp, holding 6.8%. Silver Crest Acquisition Corp was a SPAC. In August 2021, Tims China announced that it had agreed to list on Nasdaq through a merger with Silver Crest Acquisition Corp.

In November 2021, PAG also acquired Gyro Holdings, a Japanese restaurant brand operating group.

Fengxiang Food's Latest Reported Performance

According to Fengxiang Food's 2022 interim report, the company recorded revenue of RMB2.4 billion in the first half of the year, up 24% year on year.

Earlier in 2022, PAG co-founder and executive chairman Shan Weijian told Nikkei that the restaurant industry had been hit by the pandemic, but that PAG believed the pandemic would eventually end and the sector would recover, making it a potentially good time for acquisitions.

At the time, Fengxiang Food still had a market capitalization of about HK$2 billion, making PAG's move notable for operators watching consolidation across foodservice-adjacent supply chains.

Note: IPO-related figures and forward-looking comments are historical and reflect information reported in 2022.