Yum Board Approves Spinoff Plan, Raises Dividend 11%

Yum Brands Inc. said its board approved the planned spinoff of its China unit, which remains on track to close at the end of next month, as the company also raised its dividend by 11%.

The Louisville, Ky., company increased the quarterly dividend to 51 cents a share, an increase of a nickel a share.

Yum Brands said its board approved a distribution of one share of Yum China common stock for each share of Yum Brands held as of Oct. 19. The spinoff, set to close Oct. 31, is planned as a tax-free distribution to shareholders.

Yum Brands said it has repurchased roughly $5.1 billion of its shares and plans to buy back and additional $1.1 billion of its stock before year's end. The moves are part of a previously disclosed plan linked to the Yum China spinoff to return $6.2 billion of capital, excluding dividends, to shareholders.

Earlier this month, the owner of KFC and Pizza Hut, struck a deal to sell a combined $460 million stake in the soon-to-be-spunoff China operations to Primavera Capital and Ant Financial Services Group, the financial affiliate of Chinese internet giant Alibaba Group Holding Ltd.

The decision to separate the operations came after Yum Brands fell under pressure from activist investors, including Corvex Management LP and Dan Loeb's Third Point LLC.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

September 26, 2016 11:25 ET (15:25 GMT)

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