Popeyes Share value falls as Buyout Rumors die down

Shares of Popeyes Louisiana Kitchen, Inc. (NASDAQ: PLKI) fell over 6 percent after touching all-time highs during late afternoon trading on Monday after rumors of Restaurant Brands International wanting to acquire the fried chicken chain.

“In our view, a proposed buyout of PLKI by QSR is plausible. We believe the Popeyes acquisition would provide Restaurant Brands a concept that provides steady organic and unit growth in both the North American and overseas markets,” Stephen Anderson, an analyst at Maxim Group, wrote in a research note Tuesday. He added that Popeyes has “shown stronger performance worldwide in the past two years” compared to Restuarant Brands’ Burger King and Tim Horton’s chains.

However, according to CNBC, some analysts are doubtful of the acquisition. “The most apparent question to us is what does Restaurant Brands gain from acquiring Popeyes?” Andrew Charles, a Cowen analyst, wrote in a research note Tuesday. “In our view, Restaurant Brands has not accomplished the primary objective of acquiring Tim Horton’s, which was growing the brand internationally.” Charles noted that it took the company longer than expected to signed franchise development agreements in the Phillippines, United Kingdom and Mexico. He suggested that this could mean that Restaurant Brands is not “ready to acquire another brand.”

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