Panera Bread will no longer merge with Danny Meyer’s special purpose acquisition group (or SPAC), HUGS, “in light of unfavorable economic conditions, , including the deterioration of the market for initial public offerings” Panera parent company JAB Holding Company announced Friday.
The partnership was initially announced in November and the merger would have gone through once Panera had released its IPO, and Meyer would have invested in Panera Brands and been named lead independent director of the newly public company’s board.
According to the press release, both Panera and HUGS — a subsidiary of Union Square Hospitality Group — have agreed not to renew the contract which lapsed on June 30.
“We have tremendous respect for Danny Meyer, HUGS and its management team and have enjoyed a very collaborative relationship since last Fall,” Niren Chaudhary, CEO of Panera Brands said in a statement. “Unfortunately, the deterioration of capital market conditions over the last several months has led to the realization that an IPO may not be imminent, and as a result we felt it was appropriate not to extend our planned partnership.”
Chaudhary clarified that the company is still seeking to go public “as market conditions improve” despite the deal with Meyer falling through.
“Based on current capital market conditions, it is unlikely that an initial public offering for Panera will happen in the near-term, and so we have agreed not to extend our partnership beyond its existing June 30 expiration date,” Danny Meyer said in a statement. “We are disappointed that market timing was not on our side, especially as we have such tremendous admiration and respect for Panera, its entire management team and their partners at JAB."
Meyer said that moving forward, the acquisition company is still looking for another partner that “embodies the values consistent with HUGS and our Enlightened Hospitality roots, demonstrating that shareholder success is both dependent on and driven by an employee-first stakeholder culture.”
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