Denny's Agrees to $620 Million Take-Private Deal
Last fall, Denny's announced plans to close 150 of its lowest-performing locations. By the end of the second quarter, the chain operated 1,558 restaurants worldwide.
On Monday, Denny's revealed it is being acquired by a group of investors, taking the breakfast chain private. The deal, unanimously approved by Denny's board, values the company at $620 million including debt.
Details of the Acquisition
- Denny’s will be purchased by TriArtisan Capital Advisors, Treville Capital, and Yadav Enterprises, one of its largest franchisees.
- Shareholders will receive $6.25 per share in cash, totaling $322 million.
- This price represents a 52% premium over Denny’s closing stock price on Monday.
- Denny’s shares surged 47% in after-hours trading following the announcement.
Company Background
Denny’s started in 1953 in Lakewood, California, originally named Danny’s Donuts. To avoid confusion with another chain, it changed its name to Denny’s Coffee Shops in 1959. The company began trading on the New York Stock Exchange in 1969.
Challenges Amid the Pandemic
Like many casual dining chains, Denny’s experienced a sharp decline in sales during the COVID-19 pandemic. After restrictions eased, the company faced shifts in customer behavior, including increased demand for delivery services.
"Denny’s has also struggled as newer chains like First Watch promoted healthier breakfast options."
The plan to close 150 underperforming locations was part of the chain’s efforts to adjust to these market changes.
Author's Summary
The privatization deal marks a strategic move for Denny's to adapt post-pandemic by restructuring amid shifting consumer dining habits and increased competition.
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