Shares of Zoe's Kitchen (NYSE:ZOES) jumped sky-high on Friday as the fast-casual restaurant chain agreed to a buyout offer from privately held sector rival CAVA Group. The stock quickly settled down to trading right in line with CAVA's offer of $12.75 per share, which represents a 33% premium over Thursday night's closing price.
Fellow Mediterranean restaurant chain CAVA will quadruple its restaurant network if and when the Zoe's deal closes, adding up to 327 locations across 24 U.S. states. The company is getting some financing help for its all-cash offer from private equity fund Act III Holdings, led by Panera chairman and co-founder Ron Shaich. CAVA CEO Brett Schulman is taking the executive reins of the combined company, while Shaich plans to serve as chairman of the board.
Act III already holds a significant ownership stake in CAVA Group and Ron Shaich is a member of that company's board of directors. I think it's fair to characterize this deal as part of Shaich's return to the restaurant sector's limelight.
But that's all in the private sector now, assuming that Act III and CAVA are allowed to close this deal. Following Zoe's rough first-quarter report in May, its investors will be getting a quick 30% boost and a chance to walk away with their returns roughly where they were 52 weeks ago.