Dunkin’ Brands share price surges 16 percent on the back of a reported $9BILLION takeover by Inspire Brands which owns Arby's and Buffalo Wild Wings
Shares of Dunkin' Brands skyrocketed on Monday as the company confirmed its acquisition discussions with Inspire Brands, a private equity-backed restaurant company which owns Arby's and Buffalo Wild Wings.
Dunkin Brands Group Inc - which owns Dunkin' and Baskin Robbins chains - saw shares jump $14.31, or 16.1% to close Monday at $103.10.
It's the largest stock jump for the company in the last six months amid the coronavirus pandemic, and as well as the steepest in five years.
The parent of the Dunkin' Donuts and Baskin Robbins chains, Dunkin Brands Group Inc, is nearing a deal to sell itself to a private equity-backed company
Pictured: a graphic of Dunkin6' Brands Group Inc. showed Monday's boost was the largest in the last month
Monday's share price of $103 was just over three times the share prices Dunkin' Brands started out with when it went public in 2011. On July 29 of that year, the company had share prices set to $28.93.
But according to The New York Times, which first broke news of the talks, the deal being discussed would take Dunkin' Brands private at a price of $106.50 a share.
Dunkin, which also includes Baskin Robbins ice cream is preparing sell itself to Inspire Brands, a multi-brand restaurant company, for $106 per share
The price would be a 20 percent premium over the company's closing price on Friday, and implies a company valuation of about $8.8 billion.
'There is no certainty that any agreement will be reached,' said Karen Raskopf, Chief Communications Officer of Dunkin' Brands.
Dunkin's share price has more than doubled since March, as investors took heed of its success in building up its app and drive-through services. Its shares are up about 18 percent from a year ago.
Inspire Brands declined to comment when contacted by Reuters.
The announcement could be made public as soon as Monday, the New York Times said.
Inspire's portfolio includes more than 11,000 Arby's, Buffalo Wild Wings, SONIC Drive-In, Rusty Taco, and Jimmy John's locations worldwide, according to the company's website.
Inspire Brands was formed in 2018 by private equity firm Roark Capital as a holding company after Arby's completed the acquisition of Buffalo Wild Wings.
During the pandemic, stay-at-home orders changed people's working patterns.
It led to customers visiting its stores later in the day and spending more on newer and more expensive items including espresso and other specialty beverages.
Dunkin' Brands, whose 21,000 outlets are all franchised, reported revenue last year of $1.4 billion and a profit of more than $240 million.
Inspire Brands was formed in 2018 by private equity firm Roark Capital as a holding company after Arby's completed the acquisition of Buffalo Wild Wings