Allied-Lyons Agrees To Buy Dunkin’ Donuts
Undated (AP) _ Allied-Lyons PLC, a major British beverage group, and Dunkin’ Donuts Inc. announced today they have entered into a definitive agreement for Allied- Lyons to buy the international doughnut shop chain for about $325 million in cash.
Under terms of the transaction, London-based Allied-Lyons will pay $47.25 a share for all outstanding shares of Dunkin’ Donuts common stock.
Dunkin’ Donuts, based in Randolph, Mass., has 1,600 U.S. outlets and 250 abroad.
Allied-Lyons, which already owns a range of North American food companies including the tea and coffee group Tetley Inc., said Dunkin’ Donuts ″is a natural strategic fit with our existing strengths.″
Richard Martin, Allied-Lyons vice chairman and chief executive, said the acquisition shows the company’s determination to expand its food division and ″develop the successful Dunkin’ Donuts core franchise business with its strong cash flow.″
″The combination with Allied-Lyons will clearly strengthen our position as the world’s largest coffee and doughnut chain,″ Robert M. Rosenberg, Dunkin’ Donuts chairman said in a statement.
Dunkin’ Donuts, which battled takeover attempts for months, announced in September that it had begun looking at alternatives, including a merger or leveraged buyout, to try to increase its stock price.
The company reported a 34 percent drop in third-quarter earnings, much of it attributed to costs associated with battling a hostile takeover attempt from the Canadian partnership DD Acquisition Corp.
Last month, under pressure from DD Acquisition, the Dunkin’ Donuts said it had established procedures to accept bids to buy the company from interested parties. Company officials, nevertheless, declined to say outright that the company was for sale.
DD Acquisition Corp., a Canadian partnership between Cara Operations Ltd., a restaurant franchise company, and Kingsbridge Capital group, the merchant banking arm of Toronto investor George Mann’s Unicorp Canada Corp., recently increased its offer from $43 a share to $45 a share, or about $308 million. The offer was set to expire on Monday.