March 31, 2009

Shanghai Jinjiang International Hotels Development Co., Ltd. has put its 7 percent stake in Shanghai KFC on sale at a base price of RMB80 million (US$11.7 million) on the Shanghai United Assets and Equity Exchange.

Potential transferees should be international companies with more than eight years of experience in the fast food restaurant industry and more than RMB3 billion (US$439 million) investment income in three consecutive years, Shanghai Jinjiang said in a statement, noting that neither KFC rivals nor KFC rival-affiliated companies are accepted as transferees.

Market observers said US-based Yum! Brands, Inc. is likely to take over the holdings. The US food company currently holds a 51 percent stake in Shanghai KFC.

Shanghai Jinjiang is discussing with Yum! Brands to extend their franchise operation contract that will expire in May 4, 2009. Shanghai Jinjiang's stake in Shanghai KFC will decline to 42 percent after the transaction.