Please ensure Javascript is enabled for purposes of website accessibility

BJ's Restaurants Gets $70 Million Cash Infusion From Panera Bread Founder and Affiliates

By Eric Volkman - May 1, 2020 at 10:56PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Ron Shaich is now a major investor in the restaurant-chain operator.

BJ's Restaurants (BJRI -4.75%) will soon have tens of millions of fresh dollars in its coffers.

The company announced after market hours on Friday that it has agreed to sell $70 million worth of common stock to investment firm Act III Holdings and partners that BJ's described as "funds and accounts advised by T. Rowe Price Associates," without elaboration. The latter company is part of T. Rowe Price Group.

Restaurant billfold with money for a tab.

Image source: Getty Images.

That shareholding will be substantial -- as of Friday's market close, BJ's market capitalization was just under $374.5 million. Like other businesses in the food and beverage sector, BJ's operations (and its stock price) have come under strain because of social distancing and stay-in-place rules mandated to battle the SARS-CoV-2 coronavirus outbreak.

The restaurant-chain operator said in its press release trumpeting the investment that the proceeds will be used to "enhance BJ's liquidity and strengthen our ability to welcome back our team members and reopen dine-in service at our restaurants," in accordance with local regulations.

Act III is a $300 million investment vehicle recently established by Ron Shaich, the founder and former CEO of popular sandwich franchise and one-time star consumer goods stock Panera Bread. BJ's press release quoted him saying that the company's "ability to stay ahead of changing consumer trends, while remaining true to its brand heritage, provides a platform to ignite future growth, and the opportunity to more than double its current restaurant footprint."

BJ's didn't provide a timetable as to when the deal might close.

The involvement of the well-regarded Shaich appears to have impressed investors. After falling by almost 9% during the standard trading day on Friday -- a steeper slide than that of the broader equities market -- BJ's stock boomeranged back by roughly the same percentage in after-hours action.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends BJ's Restaurants. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

BJ's Restaurants, Inc. Stock Quote
BJ's Restaurants, Inc.
BJRI
$26.67 (-4.75%) $-1.33
T. Rowe Price Group, Inc. Stock Quote
T. Rowe Price Group, Inc.
TROW
$126.42 (-4.06%) $-5.35

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
397%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.