1 Rumoured Mega-Deal That Could Send This TSX Dividend Stock Skyrocketing Like a Bat Out of Hell!

Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) could unlock tremendous value if it scoops up this rumoured takeover target.

| More on:
Hands shaking over a business deal

Image source: Getty Images.

DealReporter recently released a story which noted that Papa John’s (NASDAQ:PZZA) founder John Schnatter might be close to teaming up with 3G Capital for a potential Restaurant Brands International (TSX:QSR)(NYSE:QSR) buyout of the troubled pizza chain. In two prior pieces, I called for Restaurant Brands to acquire Papa John’s on the dip, noting that there was enormous value to be unlocked after the stock went into free-fall mode after the whole fiasco that ultimately got Papa John booted off the helm.

Newly appointed CEO Jose Cil was asked by an interviewer at BNN Bloomberg several times regarding M&A and the whether or not the company was pursuing Papa John’s. Cil was quick to dismiss any talk of M&A and wasn’t willing to bite on the topic in spite of the recent buzzing of the rumour mill.

Now, if a deal weren’t yet inked, it wouldn’t make any sense for Cil to comment on the matter on national television, as it would surrender potential leverage in any deal negotiations which may be going on in the background. Cil noted that his team “looks at M&A as opportunistic,” and when it comes to opportunities, it’s pretty hard to deny the incredible once-in-a-lifetime opportunity there is to be had with the Papa John’s and its unique circumstances.

John Schnatter (Papa John himself) desperately wants to get back to the helm, and if it means serving up a sweetheart deal to a deep-pocketed and opportunistic firm like Restaurant Brands, then so be it. At this juncture, Restaurant Brands appears to have the leverage, and if it can work out a deal to get Papa John’s under its portfolio of brands for around US$2 billion, I think Restaurant Brands is getting an absolute steal that wouldn’t be possible under normal circumstances.

A Papa John’s acquisition would give Restaurant Brands a front-row seat to the sought-after pizza space, a market that won’t overlap with Restaurant Brands’s current banners, and should the deal come to fruition, Restaurant Brands could unlock tremendous value over the long term, as it takes steps to repair the tarnished brand. And for Papa John, he’ll get control of his company again, possibly as the president of the company with a fresh new team that isn’t working against him.

Foolish takeaway on Restaurant Brands and a potential Papa John’s deal

As long as Papa John keeps unnecessary commentary to himself, I suspect a Restaurant Brands-Papa John’s deal could be a mutually beneficial and a colossal unlocker of long-term value for Restaurant Brands shareholders. A pizza play is the missing piece of the puzzle for Restaurant Brands, and if a sweetheart deal is publicly disseminated, I suspect both the acquirer and the acquiree will surge.

Stay hungry. Stay Foolish.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette owns shares of RESTAURANT BRANDS INTERNATIONAL INC. The Motley Fool owns shares of RESTAURANT BRANDS INTERNATIONAL INC.

More on Dividend Stocks

young woman celebrating a victory while working with mobile phone in the office
Dividend Stocks

3 CRA Benefits Most Canadians Can Grab in 2024

You can save on taxes by claiming the dividend tax credit on Fortis Inc (TSX:FTS) shares.

Read more »

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »