Panera Bread Co. (ticker: PNRA) shares were up nearly 20 percent last week after the company announced a $7.5 billion takeover deal with JAB Holdings. With the ink still wet on the Panera deal, Wall Street analysts are already speculating about the next restaurant takeover target.
JAB Holdings is a private holding company that has been aggressively buying restaurant and food companies in the past two years. Other high-profile JAB acquisitions include a $1.35 billion buyout of Krispy Kreme and a $13.9 billion buyout of Keurig Green Mountain in 2016.
JAB isn’t the only aggressive buyer in the restaurant space of late. In February, Restaurant conglomerate Restaurant Brands International (QSR) agreed to a major $1.8 billion buyout of Popeyes Louisiana Kitchen.
Looking ahead, Longbow analyst Alton Stump says investors should expect the restaurant merger and acquisition frenzy to die down for a bit while the major buyers “digest pending acquisitions.”
But while JAB and Restaurant Brands International may be out of the bidding in the near term, the Panera deal may have increased the pressure on other potential buyers to make a move.
Prior to the JAB deal, Credit Suisse analyst Jason West had named McDonald’s Corp. (MCD), Yum Brands (YUM) and Starbucks Corp. (SBUX) as potential suitors for Panera. After the Panera buyout was announced, BMO Capital Markets speculated that buyers that missed out on Panera may turn their attention to Dunkin Brands Group (DNKN).
“The acquisition of PNRA could take a DNKN-JAB deal off the table in the near-term, but we wonder if JAB may revisit the asset at some point or if an alternate strategic buyer seeking greater exposure to the fastest-growing daypart in the industry could use the opportunity to pursue a DNKN deal with limited alternative assets remaining,” BMO says.
Shares of other possible restaurant buyout candidates, including Chipotle Mexican Grill (CMG) and Buffalo Wild Wings (BWLD) initially spiked following the Panera news.
Canaccord Genuity analyst Lynne Collier says the Panera buyout is certainly not the last of the big restaurant deals.
“With restaurant operators facing a highly competitive market for traffic and new unit growth, plus the rising tide of labor, we believe…
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