Buffalo Wild Wings’ (NASDAQ: BWLD) shares surged during Tuesday’s pre-market hours after private equity firm, Roark Capital Group, offered a bid valued more than $2.3 billion to take over the franchise, according to sources familiar with the matter.
Roark reportedly made an offer of $150 or more per share recently, according to sources. Shares surged 28 percent after The Wall Street Journal had first reported the bid, as shares were sitting at approximately $149.00.
Bloomberg reported that Roark is now bidding on Buffalo Wild Wings after the firm’s takeover attempt for Popeyes Louisiana Kitchen Inc. fell through within the year.
Although Roark did not acquire Popeyes, the firm still maintains a diverse portfolio of companies, like major franchises such as Carvel, Arby’s, and Carl’s Jr.
Buffalo Wild Wings has had a shaky year due to unfavorable prices in chicken wings and especially the conflicts with Marcato Capital in June that led to CEO Sally Smith to resign and to step down by the end of the year.
The American sports bar chain reported in its third quarter earnings that the price per pound of traditional wings rose by 25 percent year over year, and are expecting to rise another 11 percent. The chain still reported same-store sale losses year over year, but was able to minimize damages by shifting to boneless wings.
Roark is well known to acquire struggling franchises and turn them around, and it seems like Buffalo Wild Wings shift in wings isn’t satisfying the company as it may be turning to other options now.
The franchise was seeing strong sales and growth up until 2015 then hit a decline as shares have now fallen by 24.5 percent since then. The opening price on Tuesday of $148.65 is the highest shares have been since early June this year.
In its third quarter earnings, Buffalo Wild Wings raised its guidance for the fiscal year, but is still expected to report a -1.5 percent impact to same-store sales.