The deal values Popeyes at $79 a share, almost 20% higher than where the stock closed Friday.
The Atlanta-based Popeyes runs almost 2,600 restaurants across the USA with a $1.49 billion market cap.
The Ontario-based company, which already owns Burger King and Tim Hortons, will scoop up Popeyes stock at $79 per share. Delays with Tim Horton could signal slower progress for Popeyes as well.
Still, cost savings could be as much as much as 20 to 30 per cent, estimated Robert Carter, executive director of food services at market researcher NPD Group. "We view this as unlikely now that RBI is purchasing [Popeyes]".
The concept, founded in New Orleans in 1972, has over 2,600 restaurants in the US and 25 other countries.
Restaurant Brands Int'l has a 52 week low of $43.71 and a 52 week high of $76.29 with a P/E ratio of 52.10 The company's market cap is now $0. "Our franchisees have been making a lot more money". During the same period in the previous year, the company earned $0.32 earnings per share.
Personally, I'm really hoping that I can one day order both my Burger King onion rings (no competition) (fight me) and my cajun fries (with a side of biscuits to boot because, dude, have you ever had a biscuit?) all in one place, but that's still probably a ways away.
In a statement regarding the merger, Restaurant Brands CEO Daniel Schwartz said, "We get to add another iconic, incredible brand with this really rich Louisiana heritage".
The chain now has more that 2,600 outlets, mainly in the US. Andrew Charles, a Cowen analyst, wrote in a research note last week.
"The result is a transaction that delivers immediate and certain value to the Popeyes shareholders", Popeyes CEO Cheryl Bacheldersaid in the press release. Chicago-based equity research firm Zacks Investment Research has assigned this stock ABR (Average Brokerage Recommendation) of 2.56, suggesting the market has given up on the stock. The median estimate represents a -9.72% decrease from the last price of 57.60.
"When culture changes, things can go wrong", Mr. Levitt said.
Popeyes has gained a following among millennials with its focus on Louisiana flavours and fresh spices, Mr. Carter said. After the closing of the transaction, Popeyes will continue to be managed independently in the U.S. Sales at Popeyes stores open at least a year rose 1.7 percent for the fiscal year ended December 25, lower than the 5.9 percent growth reported for 2015.
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