Panera Bread and HUGS, restaurateur Danny Meyer’s special purpose acquisition company (SPAC), have called off a merger due to deteriorating economic conditions for initial public offerings, according to Panera parent company JAB Holding Company.
The deal, which was announced in November, was predicated upon Panera’s release of its IPO, which as of now may not be in the sandwich chain’s near future. Panera Brands, which is the parent company of a portfolio including Panera Bread, Caribou Coffee, and Einstein Bros. Bagels, had said at the time that it had secured an investment from HUGS, which, like other SPACS, was booming.
“We have . . . enjoyed a very collaborative relationship since last fall,” Niren Chaudhary, Chief Executive Office of Panera Brands, said in a statement. “Unfortunately, the deterioration of capital market conditions over the last several months has led to the realization that an IPO may not be imminent, and as a result, we felt it was appropriate not to extend our planned partnership.”
The company will not renew its contract with HUGS, a subsidiary of Union Square Hospitality Group, but will continue efforts to go public, according to Chaudhary.
HUGS will still look to acquire another partner, Meyer said in a statement.
SPACs have become less popular due to increased regulation, and companies’ plans for going public have dimmed as inflation, fears of recession, and Russia’s invasion of Ukraine press on.
Panera has been a private company since it was acquired in 2017 for $7.5 billion by JAB Holdings. JAB’s U.S. holdings also include Krispy Kreme , Peet's Coffee & Tea, and Keurig Green Mountain. JAB is also the largest shareholder in cosmetics and beauty giant Coty Inc.