Panera Bread's (PNRA) suitor may be showing their face.
Shares of Panera spiked about 12% in aftermarket trading on Tuesday on a Bloomberg report that JAB Holdings was in advanced talks to purchase the salad and sandwich chain. Panera Bread could be a logical fit for JAB Holdings, the growing food conglomerate that owns Krispy Kreme, Keurig, Peet's Coffee, among other assets. Joining forces with JAB could bring the Panera Brand overseas and leverage its top-flight digital ordering capabilities across many other channels.
The company did not immediately return a request for comment.
Panera has a market value of $6.3 billion, and is reportedly working with advisers to consider certain strategic options including a buyout, Bloomberg said on Monday.
Maxim Group analyst Stephen Anderson told TheStreet that a buyer would likely pay $300 a share, totaling about $7 billion. But, judging by JAB's willingness in the past to pay rich premiums for brands it covets, a purchase price for Panera could be well above $7 billion.
TheStreet takes a brief look at why JAB Holdings may be circling Panera.
No restaurant recession at Panera Bread because its brand is so strong.
While others in the restaurant space have struggled the past year due to cautious consumers, Panera has thrived in large part due to its marketing of healthier ingredients.
Panera Bread's fourth quarter same-store sales rose 3%, and by 4.2% on the year.
For the fourth quarter, Chipotle's (CMG - Get Report) comparable store sales fell 4.8%, and crashed 20.4% in 2016. McDonald's (MCD - Get Report) U.S. same-store sales dropped 1.3% in the fourth quarter, and rose a meager 1.8% for the year.
Panera Bread removed all artificial ingredients from its menu in January, and recently starting labeling soda fountains with sugar and calorie counts.
Panera has a huge opportunity in delivery.
The company had delivery in 15% of its over 2,000 stores at the end of 2016, and plans to have it in 35% to 40% of stores by the end of this year.
"We have a mass market opportunity in delivery -- salads and sandwiches travel really well," Panera Bread founder Ron Shaich told TheStreet in a recent interview. Further, the company has also started to rack up big sales via digital ordering. About 24% of Panera's sales are now done digitally.
Panera is also in supermarkets, big-time.
The company sells packaged food products at over 12,000 retail locations and online. Panera At Home, as the company calls it, has grown to a pretty sizable business for a restaurant chain known for its artisan breads and hearty soups.
Said Shaich in an interview with TheStreet last year, "When I go into a supermarket, I don't see any of the large food manufacturers -- from Kraft Heinz (KHC - Get Report) to Campbell's Soup (CPB - Get Report) to Nestle to General Mills (GIS - Get Report) -- who are taking a comprehensive approach [to improving ingredients]. These guys are picking certain product lines to improve, or certain ingredients such as removing artificial colors but not flavors."
Editors' pick: Originally published April 5.