Restaurants/Pubs

Coffee to go offers quick fix for Whitbread

16 April 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 April 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 February 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 February 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 December 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 November 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 November 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 November 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 November 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 September 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 August 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 July 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 June 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.

Chipotle partly fulfills Bill Ackman’s order

26 April 2017

Recovering sales at the $14 bln burrito chain helped keep the pushy investor's big bet on a roll. A new payments data breach could make investors queasy again, though. Chipotle has a long way to go before it cooks up the kind of return Ackman's Pershing Square typically craves.

Yum China slowly cooking up value for investors

6 April 2017

Separating KFC owner Yum Brands from its Chinese unit has yet to bring super-sized returns for shareholders. At least same-store sales in the People’s Republic are improving, especially at Pizza Hut. Drawing up recipes for corporate value creation is easy. Delivery takes time.

Baked-in premium makes Panera a fattening morsel

3 April 2017

The $6.6 bln bakery chain has leavened its growth rate with new mobile ordering and delivery services, which has buyers circling. An 8 pct price jump pushed its valuation to new highs. Buying the company, like eating one of its 720-calorie pecan rolls, could produce indigestion.

Darden owners get too gluttonous over cheesy deal

28 March 2017

Shares of Olive Garden's parent had their best day in nine years after snagging rival casual-dining chain Cheddar’s for $780 mln. It's a decent enough deal, and scale helps improve margins in the restaurant trade. But it hardly merits a rally equal to the price paid.

Starbucks embarks on ultimate market test: Italy

28 February 2017

Howard Schultz wants to woo espresso-mad Italy, which inspired his $82 bln creation, with its first-ever swanky "Roastery" in Milan. Italians have long resisted filter coffee. But depressed real estate and a partnership with an artisan baker could give Schultz the jolt he seeks.

Cox: Trump’s labor secretary is more about capital

30 January 2017

Burger-joint entrepreneur Andrew Puzder, the nominee to run the U.S. Labor Department, co-wrote a 2010 book offering a turgid - if mercifully brief - manifesto on how to get people working. But Puzder's jobs may lack the qualities the government agency was created to champion.

Heineken can go another round in pub brawl

15 December 2016

The Dutch brewer and its partner have topped up a cash offer for Punch Taverns to 403 mln pounds. Investors are thirsty for more, possibly from a rival suitor. Heineken could keep up a bit longer in a bidding war before the financial return left any strategic merits tipsy.