After falling out with other board members of fast food chain Collins Foods, business entrepreneur Stephen Copulos says he’s not ruling out a takeover of the company after stepping down as a non-executive director.

Mr Copulos resigned from the board last week after failing to gain support from other shareholders to vote against the re-election of chairman Russell Tate and prevent the adoption of the remuneration report at last month’s annual meeting.

As Australia’s second largest KFC franchisee with 50 restaurants, Mr Copulos has accused the listed public company of poor corporate governance and remuneration practices, questioned its growth strategies, and been highly critical of the poor performance of Collins Food’s Sizzler chain.

Mr Copulos holds a 17 per cent stake in Collins Foods. He told reporters this week that “all options” were on the table, including buying more shares, selling his stake to a strategic buyer or making a takeover offer.

“If it makes sense we’d consider any option,” Mr Copulos said. “I’m not in any rush to do anything.”

Mr Copulos is reported to have the support of around 300 small shareholders, and said he was disappointed that the rest of the board did not share his concerns.

“I still feel there are significant structural and governance issues that need to be addressed,” he said.

The board has defended the company’s performance, pointing to strong same-store sales growth at KFC and says it has plans to ‘refresh’ the Sizzler brand by improving menus and store ambience.

The company recently announced the appointment of barrister Robert Kaye SC, the non-executive chairman of Paperlinx, as a non-executive director.

Analysts believe Mr Copulos’ resignation as a non-executive director may be a catalyst for further corporate activity.

A takeover would enable the Copulos Group to merge its restaurants with Collins Foods’ 176 KFC outlets and create economies of scale in the increasingly competitive fast food trade.

A merger is likely to require the approval of KFC brand owner YUM! Brands in the US and the support of 18 per cent shareholder Allan Gray.

Source: Fairfax Media