Investors gobbled up shares of Dunkin’ Brands on Monday after the doughnut chain said it’s in talks to be acquired by restaurant conglomerate Inspire Brands.
The Massachusetts-based company’s stock price surged as much as 18.1 percent to $104.87 in early trading after it said it’s had “preliminary discussions” about a deal with Inspire, which owns chains such as Arby’s, Jimmy John’s and Buffalo Wild Wings.
“There is no certainty that any agreement will be reached,” Dunkin’ said in a Sunday statement, adding that it won’t comment further until a deal is made or the talks are terminated.
The deal on the table would see Inspire — which is backed by private-equity firm Roark Capital — take Dunkin’ private at $106.50 a share, valuing the company at roughly $8.8 billion, according to The New York Times, which first reported on the talks Sunday.
If it goes through, the takeover would mark a return to private ownership for Dunkin’, which also owns the Baskin-Robbins ice cream chain. The company was bought by a group of private-equity outfits — including Bain Capital, The Carlyle Group and Thomas H. Lee Partners — in 2005 before it went public in 2011.
The talks come as Dunkin’ grapples with lagging sales amid the coronavirus pandemic. Sales across its more than 21,000 franchised locations dropped 20.8 percent in the second quarter, though the company said its performance improved throughout the three-month period as it tweaked menus to satisfy customers visiting later in the day.
Wall Street expects a sunnier picture when Dunkin’ reports third-quarter earnings on Thursday. Analysts are predicting revenues of about $345 million and profits of about 76 cents per share, according to Bloomberg data, up from the second quarter’s $287.4 million in revenue and profits of 44 cents per share.