Restaurants/Pubs

Wagamama may give Frankie & Benny’s indigestion

30 Oct 2018

Restaurant Group is splashing out 559 mln pounds – near its market value – on the noodle chain. With its Frankie & Benny’s chain struggling, it could use Wagamama’s growth. But even if the UK doesn’t capsize post-Brexit, it looks hard for the buyer to make a tasty return.

Is Howard Schultz a Starbucks asset or liability?

9 Oct 2018

Bill Ackman, whose Pershing Square unveiled a $870 mln stake, thinks a presidential run by its retired founder might protect the coffee chain’s China business. Yet a liberal campaign could stymie expansion in America’s red states. Schultz’s days as a stock booster may be over.

Peltz pizza tie-up is missing one ingredient

9 Oct 2018

Papa John’s is an ideal target for activist Nelson Peltz, who has a big stake in Wendy’s and experience fixing struggling consumer companies. Getting founder John Schnatter on board is essential, though, and that’s a challenge even for an investor used to boardroom conflict.

Coca-Cola pays big price for global coffee fix

31 Aug 2018

The soda giant is spending $5.1 bln on the Costa chain of cafes. Justifying the frothy 16 times EBITDA multiple requires Coke to order up new markets for hot drinks. It’s another reminder of consumer groups’ lust for coffee. Investors in seller Whitbread are the big winners.

Starbucks plots a skinny-latte future

20 Jun 2018

The coffee chain is serving slowing sales in the U.S. and China, and a lukewarm valuation. Boss Kevin Johnson is using his tech background to attract customers, but still faces venti-sized challenges. Starbucks is shaking up the menu. It could also consider slimming down faster.

Starbucks boss seeks smoother second shot at exit

4 Jun 2018

Howard Schultz is leaving the company he built into a global icon, and he may even run for U.S. president. He stepped away in 2000, but came back eight years later. If he’s to quit Starbucks for good this time, the coffee chain will need ideas that stay fresher for longer.

Whitbread’s coffee spinoff is too slow

25 Apr 2018

The UK company is planning to hive off its Costa cafes less than two weeks after activist Elliott disclosed a 6 percent stake. That may lift the group’s undervalued shares and make the chain a bid target. But a 24-month timeline is too long for investors to wait for the takeaway.

Coffee to go offers quick fix for Whitbread

16 Apr 2018

Activist Elliott controls 6 pct of the UK hotel and coffee chain and reckons a listing of its Costa brand would add 3 bln pounds of value. It’s a simple-seeming solution to Whitbread’s discount rating. Separating investor worries about the two parts of the business has merit.

Private equity’s retail fix risks landlord revolt

5 Apr 2018

Ailing UK food and fashion chains like private equity-owned New Look or Prezzo increasingly use fast-track insolvency tools to scotch costly leases. The fad gives companies a shot at recovery, while avoiding a risky administration. But property groups may tire of taking the pain.

Stuffed KFC only has itself to blame

20 Feb 2018

The fried-chicken chain owned by Yum Brands had to close hundreds of UK restaurants after running out of poultry. Its plan to cut costs by ditching a long-term supplier for a cheaper one backfired. The cock-up shows that chasing higher margins is no sure way to feather your nest.

Investors’ eyes are bigger than Chipotle’s stomach

14 Feb 2018

The burrito chain’s shares soared 14 pct after hiring Taco Bell’s boss as CEO. But Brian Niccol’s fast-food nous may not mix well with Chipotle’s wish to be a health-conscious brand. And the firm is wrapped up in poor governance that may hamper efforts to spice up the top line.

Whitbread can give activist a hospitable welcome

7 Dec 2017

Jitters about UK consumer spending have pushed the Costa Coffee and Premier Inn owner’s valuation to a 10-year low. U.S. fund Sachem Head, which has taken a 3.4 pct stake, sees upside. Selling property or spinning off the coffee unit are among a menu of value-creating options.

Chipotle wraps succession up in rotten governance

29 Nov 2017

The embattled burrito chain’s founder Steve Ells is stepping down as CEO but becoming executive chairman. That puts too many bosses in the kitchen and may hamper the new chief’s ability to stir in much-needed new ingredients. It’s a maneuver other companies have come to regret.

Fast-food deal cures activist indigestion

28 Nov 2017

Buffalo Wild Wings is selling to private equity-owned Arby’s for $2.4 bln. It ends the chicken restaurant’s bruising 17-month fight with Marcato. The juicy 38 pct premium also salvages a decent return for the pushy investor whose stake looked like it was heading for slaughter.

Jana’s Outback bet beats a walk in the Olive Garden

24 Nov 2017

The activist has taken a 9 pct stake in the Aussie steakhouse’s owner. Cheap grocery prices and the rise of delivery apps have battered such restaurants. It took a wholesale revamp by investor Starboard to turn Olive Garden around. Jana, though, may be targeting easier pickings.

Buffalo Wild Wings could push for a spiced-up bid

14 Nov 2017

Private-equity firm Roark Capital made a $2.3 bln bid for the chicken restaurant, according to a report. That’d give activist Marcato only a modest return after a tough battle for board seats. Buffalo Wild Wings has lost some flavor, but it can still press for a little more.

Asian bid for Pret A Manger won’t cut the mustard

18 Sep 2017

Filipino fast-food joint Jollibee is eyeing the fancy sandwich chain, says Reuters, potentially uniting Chickenjoy buckets and posh ploughman’s baguettes. But a mooted price of more than $1 bln looks far too downmarket. It might need to double that to derail Pret’s IPO plans.

McDonald’s boldly supersizes its China strategy

9 Aug 2017

The burger chain will nearly double its mainland presence in five years, aided by new partners CITIC and Carlyle. McDonald’s is considerably smaller than market leader Yum. So breakneck growth makes sense – provided it can avoid slip-ups on food safety and quality control.

Chipotle’s yuck overwhelms financial yum

25 Jul 2017

The $10 bln burrito chain delivered healthy financial results that exceeded expectations. It won't be enough to restore confidence, however, after a new suspected norovirus outbreak and video surfaced of rodents at one location. More radical change at the top may be necessary.

Buffalo Wild Wings is recipe for CEO nervousness

5 Jun 2017

Marcato got three nominees elected and forced longtime boss Sally Smith to quit – the activist's original goal. That makes the other directors look oblivious to the omens before Friday's vote. Other leaders of companies under pressure can expect dwindling board loyalty.