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Panera’s scrapped SPAC tie-up deals another blow to SPAC market

Animated illustration of a toaster toasting bread, and the bread shooting out of sight

Illustration: Aïda Amer/Axios

Panera scrapped plans to go public via a Danny Meyer-backed SPAC, underscoring the difficulty of tapping capital markets in this environment.

Why it’s the BFD: We’ll likely see more SPAC mergers fail, as the market corrects the fundamental miscalculation in the benefits of going public via SPAC. The pathway is vulnerable to the whims of the underlying SPAC investors, many of which may be likelier to flee (hello, transient hedge funds!) when markets move south, as they have done, Axios' Dan Primack wrote.

Driving the news: Panera, which owns both Caribou Coffee and Einstein Bros. Bagels, and Meyer's SPAC USHG Acquisition Corp. on Friday allowed their previous agreement to lapse.

  • The deal would’ve made USHG shareholders direct shareholders of Panera following the planned IPO. Noted restaurateur and Shake Shack founder Meyer would’ve been a lead independent board director.

The big picture: More than two dozen SPAC mergers have been called off this year during one of the worst stock market routs in decades, according to Bloomberg.

What they’re saying: “We are disappointed that market timing was not on our side,” Meyer said in a release.

  • His SPAC will continue to look for another merger partner, he added.

What’s next: “Panera Brands will continue to prepare for and evaluate a potential public listing should market conditions improve,” said Panera CEO Niren Chaudhary in a release.

Flashback: Last year, Panera sold bakery chain Au Bon Pain, which it acquired in 2017, to Yum Brands and 7-Eleven franchisee Ampex Brands.

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