Panera’s CEO has proven that he can run a successful public company, but he said he expects he can do more as a private business.
“Being private is a point of competitive advantage,” CEO Ron Shaich, said on CNBC’s “Squawk on the Street” Wednesday. “This is going to allow us to do better work, it’s going to allow us to stay committed to the do the delivery initiative, to do the clean initiative we’re working on. It will enable us in so many different ways.”
JAB Holding disclosed Wednesday that it would buy Panera Bread in a deal valued at about $7.5 billion, including debt, as it expands its coffee and breakfast empire. The privately held company, headquartered in Luxembourg, owns other brands such as Keurig Green Mountain and Krispy Kreme Doughnuts.
JAB offered $315 in cash per Panera share, representing a 20.3 percent premium to the stock’s closing price on March 31, the last trading day before media reports of a potential deal.
The acquisition price is at the upper end of analyst expectations, which ranged from $260 to $350.
For shareholders that purchased the stock a decade ago at $57.34, the buyout price represents about five and half times the original value. For those that bought the stock at its 2008 low of $33.80, the acquisition price is more than nine-fold.
Shares of the stock skyrocketed more than 13.5 percent in early morning trading on Wednesday, surging to an all-time high of $310.90.
Panera’s fast casual business has grown steadily, with its stock up nearly 30 percent over the last year. Since January, the stock has risen nearly 34 percent.
“The acquisition of Panera Bread by JAB Holdings represents a significant stake in the breakfast category, adding to Krispy Kreme, Caribou, and Peet’s coffee and tea investments,” Darren Tristano, president of Technomic, told CNBC. “The move provides JAB Holdings with the significant opportunity to expand restaurants into the global markets and strengthens the positioning of retail products toward the supermarket space…The move makes sense for both companies and provides a strong runway for continued growth for the Panera Bread brand.”
Panera has made a name for itself as a healthy brand, ditching all artificial additives and preservatives in its foods and, most recently, posting caloric and sugar information about its soft drinks.
The menu revamp has been a major part of Shaich’s return to the chain in 2012. Shaich left the company in May of 2010. The CEO told CNBC last week he has no plans to retire.
“I’m going to be here,” he said on CNBC’s “Squawk on the Street.”
Panera is the fourth major restaurant chain to be purchased so far this year. Restaurant Brands International, which owns Burger King and Tim Hortons, completed its $1.8 billion purchase of Popeyes Louisiana Kitchen last week. Darden Restaurants, which owns chains like Olive Garden and LongHorn Steakhouse, recently disclosed that it plans to buy Cheddar’s Scratch Kitchen for $780 million and Oak Hill Capital Partners is slated to acquire Checkers Drive-In in a $525 million deal.