Subway's New Tempting Dish: Lure Buyers With Attractive $5B Debt Plan To Get 'The Magic Number' Valuation

Banks representing Subway presented a $5 billion debt plan for private firms hoping to acquire the sandwich chain.
The debt financing is based on a mix of loans and bonds, equating to 6.75x Subway's 12-month EBITDA of around $750 million, as per Reuters.
Amid rising concerns about higher interest rates and economic slowdown, Subway's financial advisor, JPMorgan Chase & Co JPM, thinks the debt plan may help in Subway's getting the asking price for the acquisition.
In January, Subway said it is exploring a potential sale that could value the company at more than $10 billion and has retained advisers.
In Mid-April, a bidding war started for the auction, and the company's advisors had eliminated several interested parties for offering a low valuation.
Last week, Subway received second-round bids from more than ten private-equity firms. The bids have ranged between $8.5 billion and $10 billion, so far.
As per the report, prominent private-equity firms like Goldman Sachs Group, Inc's GS buyout arm, Bain Capital, TPG, Advent International Corp, TDR Capital and Roark Capital are participating in the auction.
Subway may allow bidders to team up before submitting final offers.

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