(Adds details on Meister, China forecasts, byline)
By Lisa Baertlein
Oct 15 (Reuters) - Yum Brands Inc said on Thursday it had appointed activist investor Keith Meister to its board, bolstering speculation that the company may spin off its China business and sending shares up almost 2 percent to $70.55 in extended trade.
Meister, who heads hedge fund Corvex Management, has urged Yum to separate its 6,900-restaurant China division, which contributed 57 percent of the company’s overall revenue and 54 percent of its operating profit in the latest quarter.
Corvex is one of Yum’s largest shareholders, holding nearly 5 percent of the company’s common stock. Meister’s appointment is effective Oct. 16.
Yum said its board and management are close to finishing their review of strategic options, including those related to the company’s structure and would soon communicate the outcome.
“We have had a constructive dialogue with the board and management over the last several months,” Meister said in a statement. “I look forward to working with the board and management to expeditiously finalize a plan that we believe can deliver that value to shareholders.”
The parent of KFC, Pizza Hut and Taco Bell also cut its 2015 adjusted profit forecast, citing volatility in China and pressure from the strong U.S. dollar.
Yum now expects full-year adjusted earnings per share growth that is flat to up in the low-single-digit percentages versus a year ago. It previously said it expected growth in the low-single-digits.
Yum, which was starting to recover from a food scandal at a meat supplier in China, now expects fourth-quarter sales at established restaurants there to be flat to up 4 percent. KFC is expected to outperform Pizza Hut Casual Dining.
For the year, Yum expects the China division’s same-restaurant sales to be down in the low-single-digit percentages. (Reporting by Lisa Baertlein in Los Angeles and Subrat Patnaik in Bengaluru; Editing by Savio D‘Souza and Phil Berlowitz)