CJ Group to sell CJ Foodville with Tous Les Jours but without restaurant biz

CJ Group is seeking to sell CJ Foodville, the group’s food distribution company, together with its bakery franchise Tous Les Jours after transferring the entity’s franchise restaurant business to another group affiliate in a move to focus on core businesses by disposing uncompetitive businesses.

CJ Group has been known to be in talks with American private equity fund Carlyle Group to sell Tous Les Jours but, in fact, the group is negotiating to sell CJ Foodville with Tous Les Jours, according to a source with knowledge of the deal on Thursday. Other divisions in CJ Foodville such as franchise restaurant business will likely be transferred to other CJ Group affiliates, possibly CJ CheilJedang or CJ Freshway, the source added.

CJ Foodville has two main businesses - Tous Les Jours, the second largest bakery chain in Korea, and franchise restaurant unit that operates steakhouse VIPS and other eatery chains.

The source noted CJ Group in the prospectus sent to potential buyers already stated it was selling CJ Foodville alone with Tous Les Jours.

Industry observers had expected that CJ Group would spin off the bakery chain from CJ Foodville to sell it alone as it previously separated Twosome Place from the food service company to sell off the café chain as an independent business.

The source expected the sale of CJ Foodville with the bakery chain would allow CJ Group to pass on its management responsibilities such as contingent liability and employee retention to a new owner. In addition, the proceeds from the sale would go directly into CJ Corp, the largest stakeholder of CJ Foodville and the holding entity of CJ Group, which has been restructuring its business portfolio to better focus on core units.

CJ Group reportedly is eyeing 270 billion won ($245 million) for CJ Foodville. The deal is likely to be made at slightly above 200 billion won, according to sources with deep knowledge.

CJ Group declined to confirm details of the deal.

The conglomerate has been seeking to sell off CJ Foodville since late 2018.

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