Foodtastic, a major Canadian restaurant operator, believes an acquisition of MTY Food Group — the parent company of Cold Stone Creamery, Papa Murphy’s, Wetzel’s Pretzel’s and Baja Fresh — is “achievable in short order” at a share price of CA$43 (almost $31 per share), according to a Wednesday press release. Bloomberg reported that this price constituted a roughly 32% premium and that the total bid was worth about $720 million.
The dispute between the two Canadian companies comes after MTY said on Tuesday that it had completed a strategic review of its business plan — a process that began last year — and concluded that an acquisition by Foodtastic was not in its best interest.
In October, MTY decided not to pursue multiple acquisition offers it received from Foodtastic, the conglomerate said. MTY appointed its board chair, Victor Mandel, to replace Eric Lefebvre as CEO earlier this week.
The company then terminated negotiations with Foodtastic, and said it intended to continue with its current strategic plan, which emphasizes efficiency, simplification and disciplined capital allocation.
Foodtastic criticized these moves on Wednesday, expressing surprise at Mandel’s appointment.
“During [Mandel’s] Board tenure, MTY’s total shareholder return has been approximately -37%,” Foodtastic claimed.
The would-be acquirer said it would not ask MTY’s shareholders to vote on a deal unless there was sufficient financing for it. Foodtastic attributed the failure of its acquisition bid to mismatched perceptions of MTY’s value.
“[MTY] had unrealistic expectations about its value,” Foodtastic said in a statement. “MTY never agreed to a transaction that reflected what we view as fair value, based upon the prospects for MTY’s business.”
