JAB Holding has a deal in place to purchase Panera Bread for a whopping $7.5 billionIt turns out they may have some company in their interest for the sandwich chain. As the New York Post reports, sources indicate that private equity giant 3G Capital is considering a bid as well.
Luxembourg-based JAB agreed to a $315-a-share cash merger agreement with Panera just last week. It was believed to be an exclusive sales process in which Panera did not market itself to other suitors, but that hasn’t stopped the chain from receiving interest from others. Brazil-based 3G is looking towards throwing its hat into the ring as well, and that could prompt an old-fashioned bidding war between the financial behemoths.
“3G is definitely looking at Panera and has the capacity to make a rival bid,” according to a source.
JAB serves as the investment vehicle for the billionaire Reimann family of Germany. Among the assets already in its portfolio are Krispy Kreme Doughnuts, Keurig Green Mountain, Caribou Coffee and Peet’s Coffee & Tea. 3G, which counts billionaire Warren Buffett among its backers, has been on a buying spree of its own of late. Already in the fold are fast food giant Burger King and Canada-based Tim Horton’s, and the group recently agreed to acquire Popeyes Louisiana Kitchen.
Some observers have noted that the two investment giants are seen as allies in most circles, so the idea of a bidding war comes across as a little strange.
“The idea of them being in combat with each other is really unusual. Given that they invest in each other’s deals, it would be like going to war with your neighbor,” another source indicated.
If Panera were to back out of the deal with JAB to accept a larger offer, the company would be on the hook for a $215 million termination fee. JAB has plans in the works to begin selling its coffee products at Panera if the deal goes through. For 3G, we would expect their sights to be set on expanding the Panera brand even further. As currently constituted, Panera has 2,000 locations throughout the US and Canada. The chain positions itself as a “Bakery-Cafe,” and is noted for a commitment to clean ingredients, a positive impact on the food system and transparency.
14 APRIL 2017, USA