new York
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Denny’s, the struggling 72-year-old restaurant chain, is selling itself to a group of investors who are taking the company private.
The company announced Monday that it had sold itself to TriArtisan Capital Advisors, a private equity firm that also owns PF Chang’s, and Yadav Enterprises, a major Denny’s franchisee, in a $322 million deal (not including its significant debt load).
Denny’s board of directors approved the deal. If shareholders agree, Denny’s shares will be delisted from Nasdaq, ending nearly six decades of listing on the public stock market.
Shares jumped 50% in early trading Tuesday. Before Tuesday, the stock had lost about a third of its value this year.
Denny’s contacted more than 40 potential buyers and received several offers, but decided that this transaction “maximizes value and has determined that it is fair and in the best interests of shareholders and represents the best path forward for the company,” CEO Kelli Valade said in a statement.
Denny’s recent struggles began during the pandemic. One of its biggest selling points was that it was open 24/7. However, this requirement temporarily ended during the height of the pandemic. As of 2021, about a quarter of its approximately 1,600 restaurants have not returned to these 24-hour operating hours, so Denny’s has relaxed the franchise requirement to do so.
It also faces competition from cash-strapped customers from fast-growing chains like First Watch, fast-food rivals or people choosing to eat at home in an effort to save money.
Denny’s also announced 180 closures over the past two years as the chain attempted a turnaround plan involving renovations and new menu items to boost traffic.
Sales at locations open at least a year declined 2.9% in the most recent quarter and completed only 10 renovations, Denny’s also reported Monday evening.
Tuesday, Yum! Brands said it has launched a “formal review of strategic options” for Pizza Hut, including a possible sale of the chain formerly owned by PepsiCo.
“The Pizza Hut team has worked hard to address business and category challenges; however, Pizza Hut’s performance indicates the need to take additional steps to help the brand realize its full value, which could be better executed outside of Yum! Brands,” said Chris Turner, CEO of Yum! Marques, in a press release.
The chain has struggled against Domino’s, which recently reported another strong sales quarter, and Papa John’s. Pizza Hut, meanwhile, has been struggling for several quarters and is trying to boost sales with new value-oriented menu items that have yet to take hold.
The parent company has not set a deadline for the review to be completed and will not provide further comment.
Yum! reported earnings on Tuesday, with Pizza Hut reporting a staggering 6% drop in same-store sales at its U.S. restaurants open at least a year.
Meanwhile, Yum’s other brands are faring better. Taco Bell had another high-flying quarter with a 7% increase in U.S. same-store sales and KFC may be starting to see a turnaround, posting a 2% increase for the quarter ending September 30.
