From Nation's Restaurant News · · 1m 40s
Starbucks Eyes Chipotle Acquisition
Starbucks reportedly plans to acquire Chipotle, the biggest restaurant deal in history, sparking investor skepticism.
In brief
Starbucks reportedly plans to acquire Chipotle, the biggest restaurant deal in history, sparking investor skepticism. Starbucks is reportedly eyeing a Chipotle acquisition, which could be the biggest restaurant deal in history but faces skepticism from investors. Originally reported by Nation's Restaurant News.
Starbucks reportedly eyeing Chipotle
Starbucks is reportedly eyeing a Chipotle acquisition, the biggest restaurant deal in history.
“Starbucks is reportedly eyeing a Chipotle acquisition”
Financial Times reports early-stage plans
The Financial Times reported Starbucks worked with advisors on a takeover proposal for Chipotle, calling it 'early-stage plans'.
“early-stage plans”
Chipotle shares surge 7%
Chipotle's shares soared more than 7% on the report that Starbucks may buy the company.
“Chipotle's shares soared on a report that Starbucks may buy the company”
Starbucks shares fall 5%
Starbucks' shares fell 5% as investors were less convinced of the acquisition.
“Starbucks' shares fell 5%”
Starbucks spokesperson comments
A Starbucks spokesperson said they don't comment on rumors and are focused on their 'Back to Starbucks' strategy.
“As a matter of policy, we don’t comment on rumors and speculation”
Brian Niccol's role
Brian Niccol, who left Chipotle two years ago to join Starbucks, helped turn both brands around.
“Brian Niccol, who left Chipotle two years ago to take the helm at Starbucks”
Chipotle's stock decline
Chipotle's shares have dropped 45% through Wednesday as same-store sales slowed.
“Chipotle's shares down 45% through Wednesday”
Chipotle's sales performance
Chipotle's same-store sales have been no higher than 2.2% in each of the past six periods, half negative.
“same-store sales have been no higher than 2.2% in each of the past six periods”
Analyst skepticism
Analysts say the strategic rationale for Starbucks acquiring Chipotle isn't clear due to limited business overlap.
“The strategic rationale for [Starbucks] acquiring [Chipotle] isn’t apparent to us given limited overlap between the businesses”
Potential cost of acquisition
Starbucks would likely pay a premium to buy Chipotle, potentially costing billions in debt.
“Starbucks would likely have to pay a substantial premium to buy the chain”
Starbucks' recent improvements
Starbucks has improved same-store sales in each of the past four quarters, including 7.9% last quarter.
“same-store sales at the chain have improved in each of the past four quarters in the U.S”
The main idea
Starbucks is reportedly eyeing a Chipotle acquisition, which could be the biggest restaurant deal in history but faces skepticism from investors.
