An attempt by private equity funds to take down NYSE-listed Yum China is a red flag for investors as it shows the bidders were prepared to pay a lofty valuation, banks were ready to fund the ambitious deal and too many cooks were lined up to run the flagging business.
The consortium comprising Hillhouse Capital, Kohlberg Kravis Roberts, China’s sovereign wealth fund China Investment Corp. CIC and Baring Private Equity Asia made the $17.63 billion offer to management in July, according to two people close to the deal.
Yum China, best known as the operator of the KFC, Pizza Hut and Taco...
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