Sweet and Sour M&A

Two M&A stories this week highlight opposite ends of corporate dealmakers’ approach to honesty and fair play in the age of the coronavirus.

On Sunday, The New York Times broke news that Dunkin Brands is in talks to sell its businesses to Inspire Brands, the Roark Capital-backed company that owns several successful restaurant chains.  Instead of inviting a cycle of market speculation and dodging the reporter with “no comment,” Dunkin issued a statement Sunday night confirming the talks. And today, as the toll of infections across the country continues to rebound, the company announced it is closing 687 stores, a move that could materially threaten their potential deal.

Contrast this initiative and transparency with French luxury conglomerate LVMH’s announcement that it has agreed to buy Tiffany and Co. The $16 bil transaction is the culmination of one of the most bitter M&A sagas in memory, featuring a series of attempts by LVMH to back out of the combination it solicited over a year ago. First, the French conglomerate misleadingly claimed that its government had asked it to cancel the deal, then, with equal temerity, alleged that Tiffany mismanaged business during the height of the coronavirus. Now, as if to wipe the slate clean, LVMH’s press release quotes Chief Executive Bernard Arnault saying he believes his company “…is the right home for Tiffany and its employees…”

Meanwhile, Dunkin and Roark continue to negotiate. The Times got its story — perhaps with help from leaky bankers or lawyers. Nevertheless, Dunkin shows its management is willing to sacrifice revenues as well put the safety of customers and employees ahead of its interest in a potentially a lucrative deal.