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Pizza Hut owners now eyeing Eagle Boys

AAP logoAAP 26/09/2016 Petrina Berry

The new owners of Pizza Hut are sizing up the troubled Eagle Boys business as part of plans to build a stronger player in the Australian pizza market against market leader Domino's.

Less than a month after buying the Australian Pizza Hut business, private equity firm Allegro and three former McDonald's executives are now in takeover talks with Eagle Boys.

"We're currently considering all acquisition opportunities that offer greater scale and growth for the Pizza Hut brand, including Eagle Boys," Pizza Hut chief executive Lisa Ransom said in a statement on Monday.

Allegro and the ex-McDonald's executives bought the master franchisee licence for Pizza Hut in Australia from US retailer Yum Brands! in early September.

If an Eagle Boys acquisition goes ahead, the country's second largest pizza franchise may add about 100 stores to its 270 store count and become a more formidable rival to Domino's.

It's a prospect Domino's chief executive Don Meij says he welcomes because he believes a better Pizza Hut will help lift the profile of pizza in the fierce $4 billion takeaway food industry.

"There is room in the market for another player to be successful," he told AAP.

"They couldn't win a price war with us because we are three times bigger and much more efficient with embedded technology.

"But I think they'll find a niche in the market and that's good for the industry; we welcome that because it'll help to grow the pizza category."

He said the more "pizza noise" out there, the better it will be for Domino's campaign to lift pizza as a preferred takeaway option to McDonald's, Subway and KFC.

"Our real competitors are the large burger chains, the large fried chicken chains and the large sandwich chains," Mr Meij said.

"Would it stop our growth? Absolutely not. We will double our business in the next five years."

Pizza Hut's new owners have previously said they want Pizza Hut to be a stronger number two player against Domino's and plan to improve delivery, including better digital customer ordering systems.

They also intend to set up company-owned stores in addition to franchise outlets, with the aim to have 10 to 20 per cent of all outlets company-owned.

Eagle Boys is up for sale after the head franchisor went into voluntary administration in July.

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