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Panera Buyout Speculation No Surprise

While it is hard to handicap if a deal will happen, there has been an uptick in restaurant M&A in the last few months and it's easy to see that Panera would be an attractive target.

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Shares of narrow-moat Panera are soaring on rumors that the firm is exploring potential strategic alternatives after receiving preliminary takeover interest. While it's difficult to handicap the likelihood of a transaction it's not hard to see why a suitor would be interested. In our view, Panera is one of the restaurant operators best equipped to accommodate evolving consumer expectations regarding value, convenience, health, and technology.

In addition, there has been an uptick in industry M&A activity the past two months, including Restaurant Brands' acquisition of Popeyes, Darden's proposed acquisition of Cheddar's, and a spate of private equity transactions. An April 3 Bloomberg article cited Caribou parent JAB Holdings, Starbucks, and Domino's as potential bidders.

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R.J. Hottovy does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.