Dunkin Donuts owner soars on takeover talks

Company that owns the donut and coffee chain as well as Baskin-Robbins ice cream in discussions with Roark Capital's Inspire Brands

Shares in the owner of Dunkin' Donuts and Baskin-Robbins ice cream hit a record high on Monday after confirming takeover talks with a private equity firm.

Dunkin' Brands said it was in preliminary discussions with Inspire Brands, which also owns Arby's and Jimmy John's Sandwiches.

Inspire Brands declined to comment and Dunkin' said it was not certain a deal would be reached.

Shares in Dunkin' soared 16pc to almost $103, valuing the company at $8.4bn.

Dunkin' has 13,000 stores and a further 8,000 Baskin-Robbins outlets worldwide.

The donut and coffee chain was founded in 1950 in Quincy, Massachusetts, while Baskin-Robbins dates back to 1945 in Glendale, California.

The pandemic has hurt sales, sending Dunkin' Brands revenue down by a fifth in the second quarter, while franchisees closed 200 restaurants permanently. Sales were up 4pc to $1.4bn in 2019.

Atlanta-based Inspire Brands, founded in 2018, is fast becoming one of the biggest restaurant groups in the US. It also owns the Buffalo Wild Wings and Sonic burger chains, and has annual sales of more than $14bn.

Buying Dunkin' would give Inspire access to the breakfast market, which had been the fastest-growing segment in America before Covid struck.

Inspire is owned by private equity firm Roark Capital. It also backs Focus Brands - the owner of Auntie Anne's Pretzels and Cinnabon - and CKE Restaurants, whose chains include the Carl's Jr. and Hardee's burger outfits.