JAB to buy Panera Bread Company for $7.5bn

Luxembourg-based investment group JAB agreed to acquire US bakery and cafe chain Panera Bread Company for $315 per share in cash in a transaction valued at $7.5 billion including the assumption of $340 million of debt.

Panera shares rose about 14% to roughly $313.

JAB is the investment vehicle of Germany’s billionaire Reimann family.

JAB Holding Company and JAB Consumer Fund are overseen by three senior partners — CEO Olivier Goudet, chairman Bart Becht, and Peter Harf — and already have controlling stakes in Keurig Green Mountain, Jacobs Douwe Egberts (JDE), Peet’s Coffee & Tea, Caribou Coffee Company and Krispy Kreme Doughnuts.

The agreement, unanimously approved by Panera’s board, represents a premium of 20% to Panera’s all-time high closing stock price on March 31, 2017, the last trading day prior to news reports speculating about a potential transaction.

The transaction is expected to close during the third quarter of 2017, subject to the approval of Panera shareholders and customary closing conditions including regulatory approvals.

Entities affiliated with BDT Capital Partners are investing with JAB BV.

Panera CEO Ron Shaich said: “By any measure, Panera has been one of the most successful restaurant companies in history.

“What started as one 400 square foot cookie store in Boston has grown to a system with over 2,000 units, approximately $5 billion in sales, and over 100,000 associates.

“In more than 25 years as a publicly traded company, Panera has created significant shareholder value.

“Indeed, Panera has been the best performing restaurant stock of the past twenty years – up over 8,000%.

“Today’s transaction is a direct reflection of those efforts, and delivers substantial additional value for our shareholders.”

JAB chief executive Olivier Goudet said: “We have long admired Ron and the incredible success story he has created at Panera.

“I have great respect for the strong business that he, together with his management team, its franchisees and its associates, has built.

“We strongly support Panera’s vision for the future, strategic initiatives, culture of innovation, and balanced company versus franchise store mix.

“We are excited to invest in and work together with the Company’s management team and franchisees to continue to lead the industry.”

Shaich has entered into a voting agreement in which he and entities affiliated with him have agreed to vote shares representing 15.5% of Panera’s voting power in favor of the deal.

Following the close of the transaction, Panera will be privately held and continue to be operated independently by the company’s management team.