Dominant at home, where Jollibee has 1,000 eponymous stores welcoming diners with its smiling bee logo, Tan now wants to reshape the $5 billion group as a global fast-food company, bankers and fund managers say (all figures US$).

Primary targets include the United States and China, where it already has joint ventures, including Dunkin’ Donuts.

Tan, 64, said at a company event in July that half of Jollibee’s total sales would come from overseas stores in the next five years. Currently, foreign stores including joint ventures account for 30 per cent of sales.

This week, people familiar with the matter said Jollibee was considering bidding for Pret A Manger, a U.K.-based chain selling organic coffee and wholesome sandwiches to office workers. It is still working out a valuation and has not yet decided to bid, the people said.

“Jollibee has to keep chasing growth. They own pretty much every large chain in their home market,” said a regional banker who has dealt with the company. “They are definitely not shy when it comes to looking at mature markets.”

Ysmael Baysa, Jollibee’s chief finance officer, told Reuters this week that buying new businesses “has always been part of our growth strategy.”

Tan started out with two ice cream parlours in the 1970s, and expanded Jollibee rapidly into a fast food chain dubbed “the McDonald’s of the Philippines.” Forbes ranks him as the country’s eighth-wealthiest man.

“They see where they could utilize the knowledge and synergies they have,” said Robert Ramos at Unionbank, who helps manage $795 million in funds and holds Jollibee stock. “They are increasing the revenue stream beyond the businesses they have now… They are choosing businesses in line with their core competence.”

As discretionary incomes have grown in Asia, the region has become the second-largest fast food market globally after North America.

Jollibee has created new domestic brands and has tie-ups with foreign chains. It bought a stake in Highlands Coffee, which outsells Starbucks in Vietnam, and opened its own outlets in Saudi Arabia and the U.S.

“Premium credit”

Jollibee’s interest in Pret A Manger — which owner Bridgepoint is said to be preparing for a U.S. listing this year — comes just two years after Tan paid around $100 million for a 40 per cent stake in U.S.-based chain Smashburger, his biggest overseas deal to date.

“If Jollibee wanted to do a $1 billion acquisition, it will have access to capital. It’s very liquid whether overseas or onshore. Jollibee is a premium credit,” said a person close to the company, who was not authorised to speak to the media and asked not to be named.

“Jollibee is very clear where they would like to grow: the Philippines, China and the U.S.”

In China, the company operates about 400 stores of various brands, including joint ventures.

While Jollibee’s original menu is a hit at home and among the diaspora of millions of Filipinos working overseas, it’s a challenge to broaden its appeal to international diners — hence the drive to acquire global brands.

Jollibee’s revenue has more than tripled over the past decade to 113.9 billion pesos (C$2.8 billion), its net income has jumped to 6.16 billion pesos, powered by strong consumer spending in one of the world’s fastest-growing economies, and its shares trade at around 242 pesos each, up from 51.5 pesos a decade ago.

Other Philippine companies, too, have used their plentiful cash and access to bank credit to make overseas deals, such as Universal Robina Corp.’s acquisition of Snackbrands Australia for $462 million last year, and Alliance Global Group’s earlier $291 million buy of Bodegas Fundador from Beam Suntory.

— Reporting for Reuters by Neil-Jerome Morales in Manila and Anshuman Daga in Singapore.

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The sources said COFCO was in talks to buy the remaining 49 per cent of Singapore-listed Noble’s agribusiness for around $700-$750 million, having already acquired a 51 per cent stake in April 2014 for $1.5 billion (all figures US$).

Noble confirmed in a Singapore Exchange (SGX) announcement that it was in advanced discussions with potential buyers on the sale of its 49 per cent agribusiness stake and other strategic transactions. “No definitive or legally binding documents have yet been signed,” it added.

Earlier Tuesday, Noble declined to comment on the potential COFCO deal. State-run COFCO was not available for immediate comment.

For COFCO, a deal would reinforce its position among the world’s top global agricultural traders, rivalling the “ABCD” quartet of companies — Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus.

One source said that the big difference in the values between the first deal and a potential second deal showed COFCO had overpaid for the initial 51 per cent stake, but could now mitigate that by paying a lower price for the remainder.

The expected deal would enable Noble’s chief executive Yusuf Alireza to follow through on his November commitment to raise $500 million, seeking to retain the company’s investment grade credit rating and repair investor confidence after a bruising accounting dispute.

Shares in Asia’s biggest commodity trader have shed around two-thirds of their value since mid-February when blogger Iceberg Research alleged the company was inflating its assets by billions of dollars by not fairly representing the value of its commodity contracts.

Noble rejected the claims and board-appointed consultant PricewaterhouseCoopers found no wrongdoing in a report published in August.

The talks with COFCO may or may not result in a deal, however, two sources said they expected a deal to be announced imminently. One said it could be wrapped up by the end of the year and could include an earn out clause based on sugar prices.

The final value of any deal is also subject to change.

The deal would take COFCO’s investments in international grain trading in the past two years to around $3.5 billion, including its 51 per cent stake in Dutch grain trader Nidera.

COFCO is expected to raise its stake in Nidera by a further 15 per cent in 2016 as part of an earn out clause after Nidera missed targets in its results following the deal.

The investments give COFCO assets in some of the world’s top grain and vegetable oil producing regions, including Brazil, Argentina, Indonesia and the Black Sea area, whilst enabling it to bring food supply to China independently of the dominant ABCD operators.

— Anshuman Daga and Sarah McFarlane report for Reuters from Singapore and London respectively. Additional reporting for Reuters by Denny Thomas in Hong Kong and Dominique Patton in Beijing.

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