Yum! Brands Signs Definitive Agreements to sell Long John Silver’s and A&W All-American Restaurants (YUM)

Yum! Brands Inc. (NYSE: YUM), a quick service restaurant company, today reported that it entered into definitive agreements to sell its Long John Silver’s Inc. and A&W Restaurants to twp separate buyers.

David C. Novak, Chairman and CEO of Yum, said that the company identified strategic buyers who are passionate about two great restaurant brands and committee to their growth potential. Novak cited the company’s long-term growth focus on international expansion and improving U.S. brand positions in KFC, Pizza Hut and Taco Bell as the reason for the sale of Long John Silver’s and A&W. He said that the two restaurants do not fit with the company’s long-term growth strategy.

Yum Brands signed a definitive agreement with LJS Partners LLC to sell its Long John Silver’s restaurants. LJS Partners is le by a consortium of prominent franchisee leaders and other investors. Meanwhile, A&W will be sold to A Great American Brand LLC.

Yum Brands does not expect the sale to have a material impact on its earnings or cash flow. The transactions are expected to be completed in the fourth quarter of 2011.

Although the sale of the two restaurants is in-line with Yum Brands’ long-term growth strategy, the company’s shares fell sharply in trading today.  Yum Brands shares fell to an intra-day low of $50.31 before paring some losses and finishing the day 3.01% lower at $50.97.

Yum Brands shares have done well in last one month despite the volatility in the broad market. The stock has gained 10.85% in the last one month, compared with a gain of 7.16% for the S&P 500. Year-to-date, the stock has once again outperformed the S&P 5000, gaining 3.37%, compared with a 10.19% decline for the S&P 500.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.