Panera shares spike on report that JAB Holding is in advanced talks to acquire the company

JAB Holding in advanced talks to buy Panera: Reports
JAB Holding in advanced talks to buy Panera: Reports

It seems Panera Bread's mysterious suitor could be JAB Holding.

Shares of the company spiked more than 13 percent in aftermarket trading after Bloomberg reported that JAB was in advanced talked to acquire the bakery chain.

Representatives from Panera were not immediately available to comment.

JAB, a privately held company, headquartered in Luxembourg, owns other brands such as Keurig Green Mountain and Krispy Kreme Doughnuts.

"An acquisition of Panera Bread not only brings them a digital platform that ultimately that they can use across their portfolio, but also it provides them an opportunity for some vertical integration of the coffee business," Bob Derrington, senior research analyst at Telsey Advisory Group, said in an interview with "Power Lunch" Tuesday.

On Monday, Bloomberg reported Panera was exploring strategic options, including a possible sale, citing sources close to Panera. One of those sources told the news service that potential suitors could include JAB Holdings, Starbucks and Domino's.

While the report said that there was no certainty that a deal would be struck, analysts were quick to speculate about what company could be Panera's best suitor.

Credit Suisse analyst Jason West wrote in a research note that he sees JAB as the "most likely acquirer" of the sandwich and bakery chain.

JAB has a history of scooping up food companies. It acquired Krispy Kreme back in 2016 for $1.35 billion and purchased Keurig Green Mountain for $13.9 billion in 2015.

Not all analysts see JAB as the ideal candidate.

"We think it is unlikely a Private Equity player steps in like JAB," Matthew DiFrisco, an analyst with Guggenheim, wrote in a research note Tuesday. "JAB has completed five deals in the last six years, focusing on emerging, differentiated franchise concepts that skew towards cafes and consumer packaged goods."

DiFrisco said Panera operates in a highly competitive market and could be a higher price tag than JAB "has shown a willingness to pay."

Other analysts speculated that McDonald's, Yum Brands, Restaurant Brands International and Chipotle Mexican Grill could be potential suitors.

Peter Saleh, an analyst with BTIG wrote in a research note Monday that he still sees a private equity firm as the most likely buyer.

"While we believe the list of potential strategic buyers is likely limited to Starbucks and McDonald's given size, strategy and financial capacity, we think such a strategic buyer is possible with greater likelihood from private equity or other private operator," he said.

Saleh said that if Panera were to be acquired by another company, CEO Ron Shaich would have to be onboard, "given how instrumental he is to the brand." Shaich's controls about 16.5 percent of the shareholder vote with his Class B shares.

If Panera were to strike a deal, it would become 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.

Representatives for Domino's, JAB, Chipotle, Restaurant Brands International, Yum Brands and McDonald's did not immediately respond to CNBC's request for comment. A Starbucks representative declined to comment on the report, saying, "We do no comment on rumors or speculation."

When reached by CNBC on Monday, Panera Chief Financial Officer Michael Bufano said: "As a matter of policy, we never comment on rumors or speculation."