JAB to buy bakery chain Panera Bread in $7.5 billion deal

JAB to buy Panera for more than $7B

JAB, the owner of Caribou Coffee and Peet's Coffee & Tea, said on Wednesday it would buy U.S. bakery chain Panera Bread in a deal valued at about $7.5 billion, including debt, as it expands its coffee and breakfast empire.

JAB Holdings 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.

Panera shares had risen about 4.6 percent from March 31 through Tuesday's close of $274. The stock jumped nearly another 13 percent to $309.49 in premarket trading on Wednesday.

Luxembourg-based JAB, the investment vehicle of Germany's billionaire Reimann family, has snapped up several U.S.-based breakfast and coffee companies in recent years, including Krispy Kreme Doughnuts and K-cup coffee pod-maker and Keurig Green Mountain.

"In my view, Panera Bread becomes the crown jewel for this group," Bob Derrington, senior research analyst at Telsey Advisory Group, told "Squawk Box." He later added: "This, for JAB, makes a lot of sense."

JAB became the world's largest pure-play coffee maker by volume in 2015, when its created Jacobs Douwe Egberts in Europe, a joint venture that combined its D.E. Master Blenders 1753 business with the coffee business of U.S.- based Mondelez International.

Panera Bread restaurant
John Gress | Reuters

Panera has 2,000 bakery cafes throughout the United States and its fresh offerings appeal to health-conscious consumers. The company has also invested heavily in mobile ordering and digital technology, which Telsey's Derrington said makes them even more valuable for the group.

"Panera Bread has developed one of the best digital platforms within the restaurant industry, and they can use that… across the restaurant system that JAB operates," Derrington told CNBC.

The St. Louis-based company has reported better-than-expected earnings per share for the last six quarters.

The deal includes the assumption of about $340 million of net debt, JAB and Panera said in a joint statement.

Panera founder and Chief Executive Ron Shaich and entities affiliated have agreed to vote shares representing about 15.5 percent of the company's voting power in favor of the deal.

JAB Holding also has controlling stakes in Coty and luxury goods maker Jimmy Choo among other companies. Panera is being advised by Morgan Stanley and Sullivan & Cromwell is providing legal counsel.

Panera's stock gains have been tremendous by any measure, but just how tremendous depends on when you bought it.

An investor who bought it precisely 10 years ago today, would have paid $57.34 per share. The buyout price of $315 per share represents about 5 1/2 times the original value.

If an investor happened to buy it at the February 8, 2008, low of $33.80, he or she would have a more than nine-fold gain based on the buyout price.

CNBC's Mack Hogan contributed to this report.