To Catch A Chicken: Restaurant Brands To Acquire Popeyes For $1.8 Billion

After a week of bidding rumors, Restaurant Brands International Inc QSR and Popeyes Louisiana Kitchen Inc PLKI announced Tuesday the former will acquire Popeyes for $1.8 billion.

The deal may justify celebration for Popeyes investors who are expected to receive $79 in cash per share. The value represents a 27-percent premium based on a pre-rumor assessment of Popeyes’ 30-day volume weighted average price.

Meanwhile, RBI shareholders aren't well positioned to benefit.

Related Link: Use Any Pullbacks In Restaurant Stocks To Add Exposure: Baird

“Very good deal for PLKI shareholders,” Wedbush analyst Nick Setyan told Benzinga. “Even with QSR’s history of G&A cuts and its lower tax rate, given PLKI’s growth profile relative to QSR’s existing portfolio, I’m skeptical QSR can achieve the kind of G&A cuts necessary to make this deal accretive.”

Setyan previously predicted that the deal would be expensive, and the final sale price actually surpassed his expectation by about $4 per share.

Restaurant Brands was trading up 6.6 percent on Tuesday's news, while Popeyes spiked 19.1 percent to a value of $78.80.

Nick Donato contributed to the report.