Subway, the fast-food sandwich company, could be bought for US$9.6 billion by Roark Capital, the private equity firm with holdings in Arby’s, Baskin-Robbins and Dunkin', reports from the Wall Street Journal revealed.
Battling it out with fellow private equity firms Sycamore and Asda’s owner TDR, Roark appears to be pulling ahead in what has been a heated and drawn-out auction.
Another higher bid is possible, but the eighth-largest US restaurant chain, which has been owned by its founders for more than 50 years, looks poised for a sale, having appointed advisors back in February.
“A sum of nearly $10bn has been bandied about for the transaction of the franchise chain that operates 37,000 outlets across the world, including 20,000 in its homeland; we do not have to hand what such a price means in terms of valuation metric,” Shore Capital analyst Clive Black revealed.
“Roark would be a new home that contains leadership familiar with mass-market food, especially in the USA, given it already owns a number of brands such as Baskin-Robbins, and operates restaurants too (e.g., Hardee’s) and so any such acquisition may offer some synergistic benefit.”
Black reckons major franchisors and franchisees in the UK will have their eyes firmly focused on the deal, with Subway boasting 2,250 outlets in Britain, representing a “significant presence in the sandwich and food-to-go markets”.