Feeding the bear market

Restaurant operator Amrest Holdings is entering the Russian market, taking control of around 41 restaurants - 22 Rostic-KFCs and 19 Pizza Huts. The move gives the firm a chance to penetrate a large market with broad potential.

Amrest Holdings' entry into Russia is being carried out through the merger of Amrest Acquisition Subsidiary (AAS), a wholly owned subsidiary of Amrest Holdings, and US Strategies Inc (USSI). USSI is the main shareholder in Pizza Nord, the franchiser and operator of the 41 restaurants. The total value of the transaction was around $70 (zł.196) million, of which AAS will cover about $48 (zł.134) million.

News of the firm's move to Russia was reported by Russian daily Kommersant under the sensational headline "Poland's Pizza Hut Swallowed the Russian One," despite the fact that AAS' parent company's biggest shareholder is in fact a US firm.

Amrest Holdings is listed on the Warsaw Stock Exchange and owns a number of subsidiaries in other Central and Eastern European countries, operating several franchises including KFC, Pizza Hut, Burger King and Fresh Point. The firm's largest shareholder is US firm International Restaurant Investments, which holds a 37.5-percent stake. The firm reported restaurant sales of zł.629 million and profits of zł.38 million in 2006, compared with zł.499 million and zł.22 million, respectively, in 2005.