Introduction
In the past couple of weeks, the business section of all major news outlets, including the New York Times and the Wall Street Journal have been spotlighting consumer goods companies, specifically companies in the food/groceries industry. One of the companies under the microscope has been JAB Holdings ("JAB" or Joh. A Benckiser), a privately-held company headquartered overseas in Luxembourg. JAB Holdings' portfolio of companies coalesce around a theme, which consists of premium brands in the consumer goods sector. According to New York Times' Deal Book, JAB Holdings currently has majority stake in Peet's Coffee & Tea, Caribou Coffee, and Keurig Green Mountain, all very well-known coffee-related companies. Yet, JAB Holdings has started to pivot slightly in the past couple of years into more food-focused and restaurant industries by buying Einstein Brothers in 2014 and Krispy Kreme last year. This time, JAB Holdings has announced that the Company is acquiring Panera Bread Company (NASDAQ: PNRA), a national chain focused on providing healthier options of salads, sandwiches, soups, and baked goods as a fast casual chain.
Privatized Panera
The Future of Panera in the Eyes of the Shareholders
Panera Bread Company has around 2,300 locations in the United States and Canada, with 5.3% of sales up this year. The details of the deal include a $7.5 billion price tag attached to Panera, according to The Motley Fool. The sale of Panera is a big deal, not only because of the price of the chain, but also because JAB Holdings' strategy in retrospect has been to buy up struggling consumer good chains. Panera, once the company went public, has returned over 300% to 400% over a 8-10 year timeline, so this company does not fit the usual bill. Delish reports that on Panera's company statement, that the company has had the best performing restaurant stock in the last 20 years. For shareholders of Panera, the news of this sale has skyrocketed the stock price of Panera with nearly a 13% increase from January to the end of March. JAB Holdings has also agreed to pay $315 per share, a premium of 30% to Panera's 30-day volume-weighted average stock price as of March 31, 2017. Shareholders have been benefitting quite a bit from this acquisition.
The Future of Panera in the Eyes of the Consumer
What does this mean for consumers and the Panera Bread Company? According to Ron Shaich, the CEO and Founder of Panera, he told Fortune that consumers need not to worry. Shared by Refinery29, Shaich stated, "Panera will be a separate company with its own direction. If there are resources that we can use to help our strategic plan, we are going to look for them. But no one is going to force us to do anything." For consumers, Panera will be managed by Shaich's team, and moving forward, there will be no change to consumer experience, except for the vision in place that will be implemented by Shaich even after the end of the sale.