After Arby's Offer, Could Buffalo Wild Wings Receive A Competing Bid?

Buffalo Wild Wings (NASDAQ: BWLD) agreed Tuesday to accept a $157-per-share buyout offer from Arby's Restaurant Group, which is controlled by the private equity investment firm Roark Capital Group. It has yet to be seen if a competing bid will be presented to acquire the chicken wing restaurant chain.

The Analyst

Maxim Group's Stephen Anderson downgraded Buffalo Wild Wings' stock rating from Buy to Hold with an unchanged $160 price target.

The Thesis

Investors shouldn't rule out the possibility of another company presenting a higher competing bid offer for Buffalo Wild Wings, Anderson said in a Tuesday note. (See Anderson's track record here.) 

A $150-per-share offer may not reflect the potential for B-Dubs' management to exceed its $40 to $50 million cost savings goal — and improving food costs, including a 15-percent decline in spot chicken wing costs since the end of the summer, Anderson said. 

If it were under the control of a private company, B-Dubs' would be in a better position to accelerate a timeline for the previously planned re-franchising of restaurants and the potential sale of the R Taco concept, the analyst said.

The stock is trading near its fair value and the pending acquisition is likely to be approved by shareholders, according to Maxim Group. 

Price Action

Shares of Buffalo Wild Wings were trading at $155.55, up more than 6 percent for the day but also trading at a discount to the proposed $157-per-share takeout offer.

Related Links:

Buffalo Wild Wings Takeout Bid Limits Upside From Here; Deutsche Bank Downgrades Stock

Can Private Equity Interest Revitalize Buffalo Wild Wings?

Photo courtesy of Arby's.