Thai Express is a food court quick service restaurant that is part of MTY Food Group Inc.Christinne Muschi/The Canadian Press
MTY Food Group Inc. MTY-T, the Canadian franchiser and operator of Thai Express, Wetzel’s Pretzels and other quick-service restaurants, says it is exploring strategic options that could lead to the sale of the business.
The Montreal-based company confirmed Monday that it has hired a financial adviser to begin a formal review process with the aim of boosting shareholder returns. A range of options are being considered, including the sale of all or part of the company as well as pushing on with management’s current business plan, MTY said in a statement.
The corporation’s stock price gained 13 per cent on the news in trading on the Toronto Stock Exchange on Monday, ending the day at $38.27. Its market capitalization now stands at about $874-million.
MTY Chief Executive Eric Lefebvre and his team have been under pressure for more than a year from a series of challenges, including a pullback in discretionary spending by cash-strapped American consumers and rising food and labour costs. They’re trying to respond with menu innovations and improving online and in-store customer experiences.
When it last reported earnings in October, the company also cited the recent U.S. government shutdown as a potential negative. It said the stoppage, which was the longest in American history at 43 days, had the potential to affect the timing of small business loan funding needed for new restaurant openings and disrupt benefits on which some people rely to feed themselves.
MTY Foods issued the statement shortly after a Reuters report said the restaurant enterprise had hired TD Bank to explore a potential sale. Steady royalty fees from franchised restaurant chains have attracted priavte equity buyers in recent years, the wire service said.
Launched by Hong-Kong émigré Stanley Ma with one Tiki Ming restaurant in 1983, the company has ballooned to some 7,000 different stores under 80 banners in Canada, the United States and abroad. It has in its stable standalone street-level and food-court restaurants alike, including Baton Rouge, Madisons, Sushi Shop, Country Style, and Pinkberry.
Mr. Ma is the company’s biggest shareholder with a 13.9-per-cent stake, according to S&P Capital IQ data. The next biggest shareholder is Fidelity Investments with an 11.27 per cent position.
MTY had annual sales of about US$1.1-billion last year.