JAB Is Said to Be in Advanced Talks to Acquire Panera Bread

(Bloomberg) -- JAB Holding Co. is in advanced talks to acquire bakery chain Panera Bread Co., adding to a burgeoning food empire that already spans coffee, bagels and doughnuts, according to people with knowledge of the matter.

A deal could be announced as soon as this week, the people said, asking not to be identified as the details aren’t public. No final agreement has been made and the transaction could still fall apart, they said.

Panera shares rose as much as 15 percent from their closing price of $274 in late trading, valuing the company at more than $7 billion.

Initial takeover interest in St. Louis-based Panera came from Starbucks Corp., two of the people said.

A representative for JAB Holding declined to comment. Representatives for Panera and Starbucks didn’t immediately respond to requests for comment.

Buying Panera would add another U.S. brand to the European investment firm’s growing caffeine empire. JAB Holding already owns Stumptown Coffee Roasters, Keurig Green Mountain, Krispy Kreme Doughnuts, Jacobs Douwe Egberts and Peet’s Coffee & Tea, among others.

“JAB’s strategy of rolling up coffee and bakery chains (Keurig, Einstein Bakery, Caribou) -- and its willingness to pay a premium to do so -- would be consistent with a Panera acquisition,” Sara Senatore, analyst at Sanford C. Bernstein & Co., wrote in a note Tuesday.

Billionaire Family

JAB, backed by Austria’s billionaire Reimann family, also has invested in a variety of consumer-goods companies, such as cosmetics giant Coty Inc. and Durex condom maker Reckitt Benckiser Group Plc. Four of the Reimanns each have a net worth of about $2.9 billion, according to the Bloomberg Billionaires Index.

In the U.S., JAB has developed a fleet of co-branded restaurants that highlight its properties. The chain, called Coffee & Bagels, offers Caribou java and Einstein Bros. bagels -- an effort to entice customers by wrapping its existing brands in a new package.

Panera would push the food conglomerate in a new direction, giving it greater access to the lunch and dinner crowd.

The bakery chain, which operates more than 2,000 cafes across the U.S. and Canada, has grown steadily in recent years, becoming one of the largest operators in the fast casual segment. As it vies with the likes of Chipotle Mexican Grill Inc. to offer a more upscale version of fast food that aims to offer fresher ingredients, Panera said last week it will become the first major chain to list the amount of added sugars in its fountain beverages.

To contact the reporters on this story: Ed Hammond in New York at ehammond12@bloomberg.net, Alex Sherman in New York at asherman6@bloomberg.net, Leslie Patton in Chicago at lpatton5@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Devin Banerjee