Domino’s executive chairman Jack Cowin has dismissed a report about a potential takeover of the Australian pizza chain by US private equity giant Bain Capital as “pure speculation”.
The $1.7 billion fast food company’s share price skyrocketed by as much as 23 per cent on Tuesday morning, and was up 17.4 per cent when it was halted from trade at 11.22am AEDT. The Australian Financial Review’s Street Talk column had reported that Bain was looking at a deal to acquire part or all of ASX-listed Domino’s business, citing unidentified people briefed on the matter.
“There has been no conversation, no contact, no nothing with Bain, so that’s pure speculation,” Cowin told this masthead in a phone interview.
Domino’s chairman Jack Cowin has talked down an article that has fuelled takeover speculation.Credit: Dan Peled
Following the company’s official dismissal of the report in response to a “speeding ticket” from the ASX, the stock pared its gains when it resumed trading in the afternoon, and was up just 2.7 per cent at $15.87 shortly after 3pm.
The Canadian-born fast food veteran, who is Domino’s biggest investor and the founder of Hungry Jack’s, acknowledged there had been plenty of private equity interest in buying shares, but claimed there was “zero” truth to the AFR article.
“The reality is the share price has been undervalued, oversold, and there’s lots of people who have been looking around,” he said.
“Private equity are looking to buy shares at an advantageous price. The shares in Domino’s have been attractive at this level.”
The pizza business, which boomed during COVID lockdowns, has been struggling over the past three years as overly ambitious global expansion plans in Europe and Asia failed to bear fruit. Since the beginning of the year, its share price has almost halved and was languishing at $15.45 before Tuesday’s takeover boost, having reached a peak of more than $160 in September 2021.
Leadership instability exacerbated the company’s flailing performance: long-serving global chief executive Don Meij was replaced by former Coca-Cola executive Mark van Dyck in November last year. Van Dyck closed 200 underperforming stores as one of his first moves before departing the business after just seven months in the role.
