Dunkin’ stock is rising as the company is in talks to be sold for $8.8 billion, according to CNBC.
What’s going on:
- On Sunday, the New York Times reported that Dunkin’ Brands, the parent company of the Dunkin’ and Baskin Robbins chains, may be bought by Inspire Brands — a private equity-backed company that includes Arby’s, Buffalo Wild Wings, Sonic and Jimmy John’s.
- The deal would take Dunkin’ Brands private at a price of $106.50 a share, according to the New York Times.
- Shares for Dunkin’ are currently trading $102.55, according to CNBC. The stock has risen 38% this year.
- “Dunkin’ Brands confirms that it has held preliminary discussions to be acquired by Inspire Brands. There is no certainty that any agreement will be reached. Neither group will comment further unless and until a transaction is agreed,” the company told the New York Times in a statement.
- Jefferies analyst Andy Barish said he is not expecting a competing bid for Dunkin’, according to CNBC.
- Initially, the pandemic hurt Dunkin’s sales. The company reported a 20% drop in sales in the second quarter and announced plans to close about 800 stores, according to the New York Times. But the chain has found recovery through drive-thrus and online ordering systems.
- During the pandemic, customers have been coming to Dunkin’ later in the day and spending more on special beverages and other newer, more expensive menu items.
- “Dunkin’ already brings in more than half its revenue through drinks, and it dropped ‘Donut’ from its name last year as it seeks to shift its emphasis to coffee and take on Starbucks more directly,” the New York Times reported.
- “While Dunkin’ may not have been thought of by investors as a beneficiary of the current environment, these results make the case that it has been,” analysts at Morgan Stanley said earlier this year, according to the New York Times.
- Dunkin’ was private equity-owned before going public in 2011, according to Axios.