A private-equity-led group of investors wants to buy Denny’s.
The restaurant chain is struggling as consumers pare back spending.
Shares of Denny’s (NASDAQ: DENN) soared 50% on Tuesday after the maker of the Grand Slam breakfast struck a deal to be acquired for $620 million.
Image source: Denny’s.
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An investment group — including private equity firm TriArtisan Capital Advisors, alternative asset firm Treville Capital Group, and leading Denny’s franchisee Yadav Enterprises — agreed to purchase the diner chain for $6.25 per share. The all-cash offer represented a premium of 52% to the stock’s closing price on Monday.
“We are pleased to enter this transaction, which delivers significant, near-term, and certain cash value to our stockholders,” Denny’s CEO Kelli Valade said in a press release.
Valade noted that after contacting over 40 potential buyers and reviewing multiple acquisition bids, Denny’s board of directors determined that TriArtisan’s group represented “the best path forward for the company.”
TriArtisan partnered with Paulson & Co. to purchase Asian restaurant chain P.F. Chang’s in 2019. Yadav Enterprises also brings relevant expertise, as the operator of roughly 550 restaurants across the U.S.
“We look forward to working with Kelli and the rest of the Denny’s team and franchisees to provide resources and support the company’s long-term strategic growth plans,” TriArtisan Managing Director Rohit Manocha said.
Denny’s has been forced to shutter roughly 180 restaurants amid intensifying competition from value-focused rivals like McDonald’s. The diner chain’s U.S. same-store sales declined by 2.9% year over year in the third quarter, as cash-strapped consumers continued to cut back on dining out.
As a private company, Denny’s will have the opportunity to adapt its strategy to the current economic environment. The deal is projected to close in the first quarter of 2026, subject to regulatory and shareholder approval.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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