There was a Bloomberg report on Monday suggesting Panera Bread (PNRA 274.00) could be exploring a possible sale. Today, there are many reports covering the news that Panera Bread has indeed agreed to sell itself to JAB Holding Co. for $315.00 per share in cash in a transaction valued at approximately $7.5 billion or 2.7x trailing twelve-month sales.
Some analysts didn't think a deal would happen or that, if a deal did happen, the takeout premium would be a modest one given the run shares of PNRA have had. Those analysts were wrong on both counts.
A deal did happen and JAB's offer is 15% above Tuesday's closing stock price. To be fair, though, it is 30% above the 30-day volume-weighted average stock price as of March 31, which is the last day before the takeover speculation made the rounds.
Today's press release notes that the merger agreement with JAB, which is a Luxembourg-based company that also owns Caribou Coffee, Peet's Coffee & Tea, Einstein Noah Restaurant Group, Keurig Green Mountain, and Krispy Kreme Doughnuts, has been unanimously approved by Panera's Board of Directors.
The prospect of this deal being approved by regulators and shareholders seems pretty good for several reasons: (1) there aren't any antitrust concerns given the fragmented nature of the restaurant industry (2) the transaction is not subject to a financing condition and (3) the takeout premium is a fair-minded one.
The transaction is expected to close during the third quarter of 2017.
In conjunction with today's announcement, Panera Bread provided preliminary fiscal first quarter guidance that underscored the appealing connection it has with its customers. Specifically, it was noted that company-owned comparable net bakery-cafe sales increased 5.3% versus the year-ago period, that two-year company-owned comparable net bakery-cafe sales increased 11.5%, and that company-owned comparable net bakery-cafe sales in the fiscal first quarter outperformed the Black Box all-industry composite by 690 basis points.
Through Tuesday, shares of PNRA had risen 32% over the last 52 weeks. They are currently indicated to open nearly 14% higher.