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Yum Brands to return $6.2bn to shareholders before separation of China business

Staff writer |
Yum Brands said it will return up to $6.2 billion to shareholders before separating its China business and listing it on the New York Stock Exchange, and possibly in Hong Kong.

The KFC and Pizza Hut owner, which expects to spin off Yum China by the end of 2016, said the capital return could take various forms, including a share repurchase, tender offer or special dividend.

Yum, which has been hit by food scandals and marketing missteps in China, also said same-restaurant sales in the country fell about 3 percent in November.

The 6,900-restaurant China division accounted for 54 percent of Yum's overall operating profit in the third quarter, but sales at established restaurants in the country have fallen in four of the last five quarters.

Still, the company said it was targeting earnings per share growth of about 15 percent annually for Yum China from 2017.

Yum China will be domiciled in the United States, Yum Brands Chief Financial Officer Pat Grismer said at an investor conference in Plano, Texas.

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