Filing Flows › Yum Brands (YUM) › Takeover & LBO
Is Yum Brands (YUM) a takeover target?
A leveraged buyout at today's price plus 30% ($211.65 a share) would return about 7% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $138.39 a share (−15% against today's $162.81). At $70.0B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect. Historically 2.4% of companies with its figures were bought within a year (0.48× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $211.65 | today's $162.81 plus 30% |
| × shares | 274.0 million | |
| = Equity value | $58.0B | |
| + Debt refinanced | $14.1B | |
| − Cash | $2.1B | |
| = Enterprise value | $70.0B | 15.2× EBITDA of $4.6B |
| Fees | $1.4B | 2% of the price |
| New debt | $25.3B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $46.1B | 65% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $9.5B | $5.0B | $1.9B | $2.2B | $23.1B |
| Year 2 | $10.1B | $5.3B | $1.8B | $2.6B | $20.5B |
| Year 3 | $10.7B | $5.6B | $1.6B | $3.0B | $17.4B |
| Year 4 | $11.2B | $5.8B | $1.3B | $3.4B | $14.0B |
| Year 5 | $11.5B | $6.0B | $1.1B | $3.8B | $10.2B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 12.3× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $73.9B | |
| − Debt left | $10.2B | |
| = Buyer's equity | $63.8B | |
| Money multiple | 1.38× | on $46.1B put in |
| Buyer's yearly return (IRR) | 6.7% |
Price against return
What the buyer makes at other premiums over today's $162.81; the IRR reaches 20% at $138.39 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $179.09 | 11.5% |
| 20% | $195.37 | 8.9% |
| 30% | $211.65 | 6.7% |
| 40% | $227.93 | 4.7% |
| 50% | $244.22 | 2.9% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $8.8B | |
| EBITDA, last 12 months | $4.6B | 52.3% of revenue |
| Depreciation and amortization | $244M | |
| Capital spending | $397M | |
| Debt | $14.1B | |
| Cash | $2.1B | |
| Share price | $162.81 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 12% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Yum Brands would cost about $215.72 a share, $59.1B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $195.37 | $53.5B |
| Median | 32.5% | $215.72 | $59.1B |
| High end (a quarter paid more) | 51.8% | $247.15 | $67.7B |
The odds, from history
Historically 2.4% of companies with its figures were bought within a year (0.48× the average). Its figures put it in decile 1 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Yum Brands' latest quarter
Yum Brands, Q3 2026: revenue $2.1B (+4% year over year), operating margin 112.8%, net earnings $1.6B, operating cash flow $475M. The chart follows the revenue to costs, profit and cash.
Questions
Is Yum Brands being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Yum Brands?
A leveraged buyout at today's price plus 30% ($211.65 a share) would return about 7% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $138.39 a share (−15% against today's $162.81). At $70.0B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of Yum Brands cost?
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Yum Brands would cost about $215.72 a share, $59.1B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.