Starbucks draws interest for controlling stake in China unit

Starbucks has received proposals from prospective investors in its China business, most of whom are eyeing a controlling stake in the operation, according to people familiar with the matter.

The Seattle-based company was in the process of sifting through proposals and shortlisting a group of potential investors for a next round of bidding, the people said, asking not to be identified because the matter is private. The company could share financial and operating details with those bidders to help them assess the valuation of its Chinese assets, the people said.

While Starbucks’s preferred option was to sell a minority stake to a partner that could help return its Chinese operations to growth, it could consider selling a larger holding based on valuation and other factors, the people said.

Prospective partners, including industry players and private-equity firms, submitted non-binding proposals in June, the people said. Most want a controlling stake as that could give them decision-making powers and was better aligned with their investment strategies, the sources added.

The review of Starbucks’s Chinese business was still at an early stage, and no final decisions had been made on the structure, valuation and potential bidders, the people said.

In a statement, Starbucks said it sees “significant long-term potential in China”.