After a tumuluous period of financial unrest, restaurant supplier AmeriServe has found a home with the Wal-Mart-owned McLane Company. AmeriServe is the main U.S. distibutor of food supplies for Tricon Global Restaurant brands Pizza Hut, Taco Bell, and KFC.
Although Tricon has been forced to forward large amounts of cash to AmeriServe to keep the company running, it seemed wary of taking on ownership. Tricon did approve of the decision to be bought by McLane, who already serves a number of Tricon restaurants.Analysts at Salomon Smith Barney see the move as a profitable one for Tricon Global, but is lowering its 2001 EPS estimate by five cents to $3.15 to reflect "a higher anticipated distribution fee as well as less flexible payment terms." Salomon Smith Barney retains its Neutral, High Risk (3H) buy rating for Tricon Global Restaurants (YUM).
Salomon Smith Barney looks for the deal to close in October, but notes that it must be approved by the bankruptcy judge handling the case as well as Tricon's franchisees.