Denny’s, the struggling, 72-year-old diner chain, is selling itself to a group of investors who are taking the business private.
The company announced Monday that it’s sold itself to TriArtisan Capital Advisors, a private equity firm that also owns P.F. Chang’s, and Yadav Enterprises, a major Denny’s franchisee, in a $322 million deal (excluding its substantial debt load).
Denny’s board approved the deal. If accepted by shareholders, Denny’s stock will be delisted from the Nasdaq, ending a nearly six-decade run on the public stock market.
Shares jumped 50% in early trading Tuesday. Prior to Tuesday, the stock had lost about a third of its value this year.
Denny’s had reached out to more than 40 potential buyers and received multiple offers, but decided that this transaction “maximizes value and has determined it is fair to and in the best interests of stockholders and represents the best path forward for the company,” CEO Kelli Valade said in a statement.
Denny’s recent struggles began during the pandemic. One of its main selling points was being open 24/7. However, that requirement temporarily ended during the height of pandemic. Since 2021, about a quarter of its roughly 1,600 restaurants have not returned to those around-the-clock hours, so Denny’s eased up on the requirement for a franchise to do so.
It’s also facing competition for cash-strapped customers from rapidly growing chains like First Watch, fast food competitors or people opting to eat at home in a bid to save money.
Denny’s also announced 180 closuresover the last two years, with the chain attempting a turnaround plan that involves remodels and new menu items to jumpstart traffic.
Sales at locations open at least a year declined 2.9% in the most recent quarter and it only completed 10 remodels, Denny’s also reported late Monday.
Pizza Hut for sale?
On Tuesday, Yum! Brands announced it launched a “formal review of strategic options” for Pizza Hut, including a possible sale for the chain that was once owned by PepsiCo.
“The Pizza Hut team has been working hard to address business and category challenges; however, Pizza Hut’s performance indicates the need to take additional action to help the brand realize its full value, which may be better executed outside of Yum! Brands,” said Chris Turner, CEO of Yum! Brands, in a press release.
The chain has struggled against Domino’s, which recently reported another strong quarter of sales, and Papa John’s. Pizza Hut, meanwhile, has struggled for the past several quarters and is attempting to juice sales with new value-driven menu items that haven’t taken hold.
The parent company didn’t set a deadline for the completion of the review and won’t comment further.
Yum! reported earnings Tuesday, with Pizza Hut recording a stunning 6% drop in same-store sales at its US restaurants opened at least a year.
Meanwhile, Yum’s other brands fared better. Taco Bell had another high-flying quarter with a 7% increase in US same-store sales and KFC is perhaps starting to experience a turnaround, posting a 2% rise for the quarter ending on September 30.
By CNN
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