JAB to buy Panera Bread in $7.5bn deal

Shares in Panera Bread surged in pre-market trade after the company said it has entered into a definitive merger agreement under which JAB Holdings will buy the US bakery chain for $315 a share in cash, in a transaction valued at around $7.5bn.

The deal, which has been unanimously approved by Panera's board of directors, represents a premium of approximately 30% to the 30-day volume-weighted average stock price as of 31 March, the last trading day prior to news reports about a potential transaction, and a premium of around 20% to Panera's all-time high closing stock price as of that same date.

Panera chairman and chief executive officer Ron Shaich said: "In more than 25 years as a publicly traded company, Panera has created significant shareholder value. Indeed, Panera has been the best performing restaurant stock of the past twenty years - up over 8,000%. Today's transaction is a direct reflection of those efforts, and delivers substantial additional value for our shareholders.

"Our success for shareholders is the by-product of our commitment to long-term decision making and operating in the interest of all stakeholders, including guests, associates, and franchisees. We believe this transaction with JAB offers the best way to continue to operate with this approach. We are pleased to join with JAB, a private investor with an equally long-term perspective, as well as a deep commitment to our strategic plan."

The transaction is not subject to a financing condition and is expected to close during the third quarter of this year.

At 1120 BST, Panera shares were up 12.6% in pre-market to $308.50.