Burger King Parent Said to be Exploring Options
St. Louis, MO/April 11, 2017 (STLRestaurant.News) – The story that St. Louis-based Panera Bread is going to be purchased by an out of town entity just got a lot more complicated. Last Tuesday we reported on the rumors that the bakery-cafe chain was going to be bought out by an outside firm. The next day, we had learned that JAB Holding Company, Krispy Kreme’s parent, had reached a $7 billion deal to buy the company. The terms of the deal had JAB paying Panera stockholders $315 per share, and assuming $340 million in debt.
But now it seems there is a new bidder interested in buying Panera. The Warren Buffett-backed private equity firm 3G Capital, based in Brazil, is reportedly exploring the possibility of making a competing bid for Panera Bread. The New York Post () cites unnamed “a source close to the situation” in its report that 3G, which owns Burger King and Tim Hortons and just entered a purchase agreement with Popeyes Louisiana Kitchen, has hired investment bank Lazard to study the possibility of a bid for Panera.
The move isn’t unusual in itself, but would represent a new strategy by 3G, since the Brazilian firm has worked with JAB Holdings in the past—both firms have invested in each other’s past deals, according to the Post. The history of the two private equity firms has a somewhat symbiotic relationship. JAB Chief Executive Olivier Goudet is also chair of 3G’s Anheuser-Busch InBev.
Each PE would bring something a little different to Panera’s table. Luxembourg-based JAB owns Keurig Green Mountain, Peet’s Coffee & Tea, Caribou Coffee and Krispy Kreme Doughnuts. If they prevail in the purchase, it’s expected that they would offer Peet’s and Caribou products inside Panera’s bakery-cafes. There is speculation that 3G would use Panera to expand its Tim Horton presence beyond Canada, and in doing so bolster Panera’s breakfast business.
That deal JAB had struck with Panera had been expected to close in the third quarter of 2017. It’s not clear now if 3G’s interest in the St. Louis-based company will delay a sale, nor how long that delay would last. Any offer from 3G would need to be substantially better than JAB’s current deal, since that agreement carries a $215 million, or three-percent termination fee if Panera backs out to take a better offer.