Could the sale of Crust Gourmet Pizzas save the Retail Food Group Limited (ASX: RFG) share price?

Retail Food Group is a master franchisor of various fast food chains including Michel’s Le Cafe, Gloria Jeans, Brumby’s, Donut King, Cafe2U and Pizza Capers. It is also a major roaster and supplier of coffee products.

Why RFG shares are up 15%

The RFG share price is up 15% after the Australian Financial Review initially reported in Street Talk that PAG Asia Capital, an Asian private equity investor, was in talks to buy Crust Gourmet Pizzas after going through an auction process..

The AFR article indicated that Crust, the third biggest pizza chain behind Domino’s Pizza Enterprises Ltd. (ASX: DMP) and Pizza Hut Australia, could be worth around $100 million.

However, RFG then responded to the AFR article by stating it is considering selling assets like Crust Gourmet Pizzas but the amount exceeds RFG’s expectations for the sale price.

Despite the share price recovery today, RFG shares are still down around 95% over the past two years as media reports questioned the long-term viability of the franchisees. The potential sale of Crust news does not make me believe that RFG is now a buy.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).