(Bloomberg) — Panera Bread Co. is exploring strategic options including a possible sale after receiving takeover interest, people with knowledge of the matter said.
The bakery chain, which has a market value of about $6.5 billion, is working with advisers to study the options, said the people, who asked not to be named discussing the private process. Potential suitors could include JAB Holding Co., Starbucks Corp. and Domino’s Pizza Inc., one of the people said.
There’s no certainty a deal of any sort will be reached for St. Louis-based Panera, the people added.
A spokesman for JAB declined to comment, and a Domino’s spokesman said the company has “a lot more opportunity for growth in pizza.” A Starbucks spokeswoman said the company doesn’t comment on rumor or speculation and is excited about the launch of its new fresh-food menu Mercato, which includes salads and sandwiches.
“As a matter of policy, we never comment on rumors or speculation,” Panera Chief Financial Officer Michael Bufano said in an emailed statement.
Shares of Panera jumped 7.9 percent to $282.45 as of 2:58 p.m. in New York. The stock climbed 28 percent in the 12 months through last week, closing Friday at an all-time high of $261.87.
Restaurant Deals
Panera has grown steadily in recent years, becoming one of the largest chains in the fast casual segment — a more upscale version of fast food that aims to offer fresher ingredients. But a broader slowdown has put pressure on restaurant companies to consolidate. While Panera’s revenue has risen to $2.8 billion last year, net income has declined each year since 2013 to $145.6 million.
The conditions have led to an uptick in restaurant deals over the past few months. Restaurant Brands International Inc., the owner of Burger King and Tim Hortons, completed a $1.8 billion purchase of Popeyes Louisiana Kitchen Inc. last week. Checkers Drive-In Restaurants Inc. will be acquired by Oak Hill Capital Partners in a $525 million deal. And Darden Restaurants Inc., the company behind Olive Garden, announced plans last week to buy Cheddar’s Scratch Kitchen for $780 million.
Panera, led by founder and Chief Executive Officer Ron Shaich, is vying with the likes of Chipotle Mexican Grill Inc. to be the progressive vanguard in the restaurant industry. Panera said last week it will become the first major chain to list the amount of added sugars in its fountain beverages.
The company operates more than 2,000 bakery-cafes across the U.S. and Canada, offering breads, pastries, soups, salads and sandwiches.
(Updates with Starbucks comment in fourth paragraph.)
–With assistance from Craig Giammona and Leslie Patton
©2017 Bloomberg L.P.
This article was written by Ed Hammond from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].
