Florida, Spring Hill, Nature Coast Commons, Shopping Center, Panera Bread.
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Danny Meyer SPAC and Panera Bread canceled a deal to bring the sandwich chain to the public again, citing market conditions.
In November, the parent company of sandwich chains Caribou Coffee and Einstein Bros. Bagels announced that it was preparing to go public and secured an investment from USHG Acquisition, Meyer’s private acquisition firm.
It was an unusual deal for SPAC, which typically uses bank funding and IPO proceeds to bring privately owned companies to the public. The planned arrangement would have exchanged USHG Acquisition shares for shares of the sandwich chain and allow the company to survive the merger with Panera’s subsidiary Rye Merger.
At the time of the deal, SPAC was still thriving, backed by enthusiastic investors who loved its accessibility, and the broader market was still rising. But high-profile failures and the threat of regulation have made SPACs less popular, while the war in Ukraine, inflation fears and a mounting recession put off plans for many companies to advertise their shares.
The merger was due to be completed by Thursday, otherwise either party would have been free to finalize the deal. On Friday, Panera delivered written notice to USHG that it would terminate the agreement after the deadline was exceeded, according to a regulatory filing.
“Based on current capital market conditions, an IPO for Panera is unlikely in the near term, and so we have agreed not to extend our partnership beyond its current expiration date of June 30,” Mayer said in a statement.
Shake Shack founder added that his SPAC will continue to look for suitable investments.
Panera became private in 2017 after JAB Holding bought the company for $7.5 billion. As a private company, the chain has continued to invest in technology, boosting its digital sales and maintaining its reputation as a leader in the restaurant industry.
The termination is a blow to JAB, which has trimmed its portfolio over the past year. The company, the investment arm of the Reimann family, sold Au Bon Pain to franchisee Yum Brands last June. Under JAB ownership, many of the Au Bon Pain locations have been converted into Panera restaurants, reducing its footprint from around 300 to 171 locations.