Restaurants/Pubs

Refreshing candor springs from Jack in the Box

18 Feb 2016

The fast-food chain isn’t blaming currency, the weather or other such issues for an earnings miss that sent its stock slumping 18 pct. It’s being much more forthright: the new all-day breakfast from rival McDonald’s whacked prices. Such honesty is rare – and is to be applauded.

Cox: Two signs of M&A bacchanal’s last hurrah

1 Dec 2015

The boom just topped $4 trln, helped along by one telltale massive deal and another much smaller one. Pfizer’s takeover of Allergan is clearly predicated on exploiting tax loopholes while a U.S. retailer is getting into the pizza racket. Both indicate a cycle well past its peak.

Yum split offers value with chance of aftertaste

20 Oct 2015

The KFC parent will hive off its troubled China business into a separate traded company - as suggested by activist Corvex. It’s logical: the two parts are effectively separate already. The catch is that the U.S. unit will still share Chinese growth risks, but without the control.

Fat Americans inflate peculiar stock market bubble

17 Jun 2015

Restaurant IPOs are hot, with chicken-wing outlets soaring to dizzying valuations. So are attempts to deal with obesity. Fitbit’s launching a $3.7 bln float. A loss-making double-chin reduction specialist got a $2.1 bln bid. It all gives new meaning to “overweighting” stocks.

Shake Shack unveils a cluckin’ $250 mln sandwich

21 May 2015

The value of Danny Meyer’s upscale burger chain shot up 8.5 pct, seemingly on news that it may start outlets serving up chicken-based fare. Investors seeking signs of exuberance in wearables might do better looking at edibles. Shake Shack is now worth 550 times earnings.

McDonald’s wage hike portends shareholder diet

2 Apr 2015

S&P 500 buybacks and dividends set a new record at $900 bln in 2014. But as U.S. unemployment falls, firms like the fast food chain are beginning to invest in workers. Higher pay costs, along with higher interest rates, could thin the wads of cash companies hand investors.

Starbucks Venti cup is half full

30 Oct 2014

Sales at the $60 bln coffee chain’s established locations increased less than expected. Even so, 10 pct revenue growth is a problem the likes of McDonald’s would love to have. Savvy marketing and smart acquisitions should help Starbucks keep pace with changing consumer tastes.

McDonald’s needs some time on Burger King’s grill

3 Sep 2014

The $91 bln giant isn’t growing. And the stock lags its rival’s. Winning burger lovers alienated by BK’s planned move to Canada would add little special sauce to McDonald’s sales. But a serving from the smaller company’s fat-trimming menu would please shareholders more.

Red Lobster sale leaves fishy smell at Darden

16 May 2014

The restaurant conglomerate is selling its floundering seafood chain for $2.1 bln, pre-empting a non-binding vote on the separation forced by activists. Engaging with agitators doesn’t always bring harmony – ask Sotheby’s – but Darden’s siege mentality exposes its board and CEO.

From Ally to Zoe’s, IPOs hint at back to basics

15 Apr 2014

Investors had an appetite for most any new issue until last week. Six of 10 offerings couldn’t fetch the desired price and six were yanked as fear again mingled with greed. A fresh crop of sellers, including Moelis and Weibo, may encounter a more rational market than expected.

All-you-can-eat democracy may sicken shareholders

24 Feb 2014

An activist wants investors in $7 bln U.S. restaurant group Darden to be allowed a vote on a spinoff of Red Lobster. It’s a big step from giving all owners a say on governance matters to second-guessing strategic ones. Too much direct intervention could do more harm than good.

April Fool’s comes early to comical M&A market

6 Feb 2012

It’s hard not to smirk at America’s largest title insurer buying steak chain O’Charley’s. Not only does it sound like a bad joke, it defies conventional wisdom both on conglomerates and the use of premium proceeds. But for idle bankers, even oddball deals are no laughing matter.

Dunkin’ IPO extends bubble thinking beyond tech

27 Jul 2011

The doughnut chain's shares surged in their debut even after pricing over the range. Its valuation of 17 times EBITDA isn't as silly as the sales multiples fetched by LinkedIn or Pandora. But a premium to Starbucks is undeserved. Investors are overexcited about perceived growth.

Food inflation favors corporate strongmen

27 May 2011

Fickle weather, decreasing farmland and more mouths are pushing up prices of wheat and other soft commodities. Companies are now being forced to pass along these costs to consumers. Big brands and proactive market leaders, like McDonald's and Pepsi, stand to brave the storm best.

Nelson Peltz flubbed his $2.3 bln fast-food order

20 Jan 2011

The activist investor wants to unload the Arby's sandwich chain, which he used two years ago to buy rival burgerflipper Wendy's with the promise of extracting juicy synergies. That didn't happen and may have cost shareholders. But he may still wind up with the better business.

Dunkin’s financial story still has holes

16 Nov 2010

Nearly five years after devouring the U.S. doughnut maker in one of the era s most highly leveraged buyouts, private equity owners are refinancing $2 bln of debt and collecting a dividend. Yet strong growth can t glaze over ongoing concerns. Dunkin is still geared to the brim.

Burger King swaps buyout barons for private equity

2 Sep 2010

The capitalists behind Anheuser InBev are relieving TPG, Bain and Goldman of command of the fastfood chain for $4 bln. While the sponsors relied on typical financial engineering, BK's new Brazilian owners have a grander plan: to do for burgers what they did for beer.

Reheating Burger King won’t be another LBO whopper

1 Sep 2010

Buyout houses had it their way with the chain in 2002: a desperate seller and little competition for the necessary turnaround. The equity sliver TPG, Bain and Goldman still own in the $2.5 bln firm is worth nearly four times their whole investment. The next bite looks gristly.

Time to call time on Mitchells & Butlers board

25 Jan 2010

The board of Britain's biggest pub company made a fundamental error. Upsetting a 23 percent shareholder is asking for trouble, and when the holder of another 18 percent agrees with him, the end is nigh. The board will be thrown out on Thursday, and quite right too.

M&B shows how not to run a pub company

14 Jan 2010

The barroom brawl in the boardroom of the UK's biggest pubs group is starting to get nasty. There could be serious injuries at Mitchell & Butler's annual meeting on Jan. 28 unless the spat over the definition of an independent director is resolved.