Panera Bread (PNRA 316.20, +2.90) has climbed 0.9% in pre-market after the New York Post reported that Warren Buffett-backed 3G Capital may make a rival bid for the quick-service restaurant.
Last week, Panera Bread agreed to be acquired by JAB Holding for $7.50 billion in cash, which translated to a 20.0% premium to Panera's closing price from the day before. JAB Holding planned to close its acquisition of Panera during the third quarter of 2017, but today's news suggests that Panera may entertain a bid from 3G Capital, which would represent the first time that JAB and 3G competed against each other.
Today's report in the New York Post speculates that acquiring Panera would give 3G's Tim Hortons an opportunity to expand outside of Canada and could help improve Panera's struggling breakfast business.
If a bidding war develops between 3G Capital and JAB Holding, investors should note that even though Panera trades at an all-time high, its valuation compares favorably to some industry peers like Chipotle Mexican Grill (CMG 454.28, 0.00).