(Adds details on cost savings from selling restaurants to
Oct 11 Yum Brands Inc, owner of Pizza
Hut, KFC and Taco Bell chains, said on Tuesday it expects to
return as much as $13.5 billion to shareholders by 2019 as part
of a program started last year, sending shares up as much as 3.8
Yum said it will increase franchise restaurant ownership to
93 percent from the current 77 percent when its China business
is spun off on Oct. 31.
The company aims to be least 98 percent franchised by the
end of 2018. Shifting to independent owners will enable Yum to
reduce risk and lower costs and move to a greater dependence on
more stable franchise and license fees.
The company said it had bought back about $5.5 billion of
its shares as a part of a previously announced $6.2 billion
capital return program, reducing its share count by about 16
Yum also said it would expand the plan, resulting in a total
return of $13.5 billion to shareholders, including dividends.
The company said it will reduce annual capital expenditure
to about $100 million in 2019 from about $500 million in 2015
and plans to reduce general and administrative expenses by a
cumulative $300 million by fiscal 2019.
Yum's China business will begin trading on Nov. 1 on the New
York Stock Exchange with the ticker symbol YUMC. The new
company, Yum China Holdings Inc, will become a licensee of Yum
Brands in mainland China and will have exclusive rights to KFC,
Pizza Hut and Taco Bell.
Yum last week reported its first same-store sales drop in
five quarters in China, blaming anti-U.S. protests after an
international court rejected China's claim to historic rights in
the South China Sea.
Shares in Yum were up 2 percent at $89.15 after hitting a
session high of $90.68. Up to Monday's close, the stock had
risen about 20 percent since the start of the year.
(Reporting by Siddharth Cavale and Abhijith Ganapavaram in
Bengaluru; Editing by Ted Kerr and Jeffrey Benkoe)