Popeyes Said to Have Snubbed Bid From Arby's During Sale

Updated on
  • Arby’s offer said to have been structured as reverse takeover
  • Chicken chain’s shares trading close to agreed offer price

Burger King Parent Buying Popeyes Chicken for $1.8B

Popeyes Louisiana Kitchen Inc., which said Tuesday it agreed to be bought by Restaurant Brands International Inc. for about $1.8 billion, received a rival bid from Arby’s Restaurant Group Inc. during the sale process, according to people familiar with the matter.

The offer from Arby’s, which is backed by Roark Capital Group, would have been structured as a reverse takeover, the people said, asking not be identified as the details of the bid aren’t public. Under the terms offered this weekend, shareholders would have received $40 a share in cash as well as equity in the new combined company, the people said, with Roark owning 80 percent.

While Roark and Arby’s believed that proposal valued Popeyes at about $90 a share, the company’s board thought the offer was worth significantly less than that figure. Popeyes also preferred Restaurant Brands’ all-cash offer because it was seen as having a lower execution risk, the people said.

Burger King-owner Restaurant Brands will pay $79 a share for Popeyes, with the deal expected to close by early April.

Popeyes’s shares closed just below Restaurant Brands’ offer price, ending the day at $78.73 in New York. The narrow spread implies traders see little risk of that transaction falling apart.

Representatives for Arby’s and Popeyes declined to comment. A representative for Roark didn’t immediately respond to requests for comment.

Roark bought Atlanta-based sandwich chain Arby’s from Wendy’s Co. in 2011 in a transaction valued at about $430 million. The company was founded in Boardman, Ohio, in 1964 by Leroy and Forrest Raffel, who offered fast-food roast beef sandwiches as an alternative to burgers.

— With assistance by Leslie Patton

(Adds valuation details in third paragraph.)
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