The Owner of Sonic and Arby’s is Trying to Buy Dunkin’: Live Updates


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Roark Capital is in the news, after the investment firm’s Inspire Brands unit opened talks to buy Dunkin’ Brands for nearly $9 billion. Today’s DealBook newsletter provides a primer on the firm.

Roark, based in Atlanta, bought Arby’s for $430 million 2011 and used the company to amass a portfolio of what it calls “quick service restaurants.” After it closed a $2.9 billion acquisition of Buffalo Wild Wings in 2018, it merged the businesses to create Inspire Brands.

Inspire has since bought chains like Sonic and Jimmy John’s (which it acquired from another part of Roark’s portfolio). Inspire now employs more than 325,000 people directly and via franchises, operates more than 11,000 restaurants and generates almost $15 billion in annual sales. Though backed by Roark, the business has also raised its own funds through family offices and other investors.

Roark itself was founded in 2001 by Neil Aronson, who started his career in the hospitality industry. Described by bankers as more low-key than the stereotypical New York financier, he named the firm after the protagonist in Ayn Rand’s “The Fountainhead.” Roark’s increasingly ambitious deals have enticed more bankers from New York to make the trip to Atlanta to get in on the action.

Since its beginning, Roark has focused on franchised businesses, like Auntie Anne’s, Batteries Plus, Carvel Ice Cream and Cinnabon. It’s held many of those purchases longer than the typical private equity investor — in some cases, for more than a decade. Still, it has had notable exits, like the well-received initial public offering of Wingstop in 2015.

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BP on Tuesday reported an $86 million profit for the third quarter. The earnings, calculated on “underlying replacement cost,” most closely watched by financial analysts, were a big improvement on the $6.7 billion reported loss for the second quarter, when oil prices and demand were slammed by the effects of the coronavirus pandemic.

Analysts said the results were good considering the grim environment in which the pandemic continues to weigh on demand for BP’s products, especially jet fuel for air travel. BP said that recovering oil and gas prices helped the results.

“This is a solid result in a challenging environment,” Stuart Joyner, an analyst at the market research firm Redburn, wrote in a note to clients.

Bernard Looney, who became chief executive of BP earlier this year, has embarked on a makeover of the oil giant, saying he will gradually reduce BP’s dependence on fossil fuels like oil and gas and boost clean energy like wind, solar and hydrogen.

On a call with analysts Tuesday, Mr. Looney said he had felt when he took over, BP was “out of step” with parts of society, its own employees and many shareholders.

“It is very hard to be a long-term, successful company when you are out of step,” he said.

So far investors seem to remain skeptical that BP and other oil companies can make the transition to clean energy. BP’s share price has been hovering near quarter century lows.

Credit…Justin Lane/EPA, via Shutterstock

Tiffany & Company has received all regulatory approvals required for the completion of its $16.2 billion acquisition by LVMH Moët Hennessy Louis Vuitton, the French luxury goods group.

The American jeweler confirmed Tuesday morning in an S.E.C. filing that it had received a green light from the European Commission late Monday. The approval is the latest twist in an increasingly acrimonious legal battle between LVMH and Tiffany, which began last November with the unveiling of their deal, the biggest proposed acquisition in the history of the luxury sector.

For a time, it looked like a perfect match. But Tiffany’s sales were hit by the fallout of the coronavirus pandemic, signs emerged that LVMH was looking to back away from the deal. In September, LVMH, which owns brands like Louis Vuitton and Dior, said it would pull its offer — prompting Tiffany to start a legal claim in a Delaware court that sought to have the negotiated terms enforced and included accusations that LVMH had deliberately delayed the deal.

LVMH started a counter claim, arguing that Tiffany’s decisions to cut capital and marketing investments, take on fresh debt and pay cash dividends despite the pandemic meant that it was a different business than the one it had agreed to buy.

The court has said a four-day trial hearing will commence on Jan. 5, 2021.

  • Amazon announced on Tuesday that it would hire 100,000 new seasonal employees to keep up with increased demand over the holiday season. “With more than 12 million Americans out of work according to the U.S. Bureau of Labor Statistics these new seasonal roles in several locations across the US and Canada will complement its regular full- and part-time positions,” the company said in a news release. Amazon hired 200,000 workers during last year’s holiday season.

  • AMC announced on Tuesday that several theater locations in Northern California, including in San Francisco and the greater Bay Area, will resume operations beginning Friday. As a result, AMC expects to have about 540 of its 600 theaters open by the end of October. “The reopening of movie theaters around the country is essential to the theatrical industry and the entire entertainment ecosystem, and we thank local leaders in the Bay Area communities for allowing our guests to return to AMC,” said the company’s chief executive, Adam Aron.

  • Wall Street tried to find its footing on Tuesday, with the S&P 500 posting a small gain in early trading after suffering its biggest single-day loss in more than a month the day before.

  • Concerns about rising coronavirus cases in Europe and the United States and an impasse over fresh economic stimulus had pushed the S&P 500 index nearly 2 percent lower on Monday. The index rose slightly in early trading Tuesday.

  • In Europe, indexes continued their decline, amid new restrictions on activity there. The Stoxx Europe 600 fell 0.6 percent. In France, the CAC index dropped 1.1 percent, and the DAX index in Germany was 0.4 percent lower.

  • Economists at Berenberg Bank said that the second wave of the pandemic could all but wipe out economic growth in the eurozone in the fourth quarter of this year. “If virus trends do not start to stabilize in early November, the eurozone economy will likely contract,” at the end of this year, Holger Schmieding, chief economist at Berenberg, wrote in a note.

  • Investors were looking ahead to a busy day of quarterly earnings. Pharmaceutical firms include Merck, Novartis and Pfizer will provide coronavirus treatment updates along with earnings. Microsoft is also scheduled to report on Tuesday.

  • The industrial machine manufacturer Caterpillar reported a 23 percent drop in third-quarter revenue compared with the same quarter in 2019. Profit in the quarter plummeted 54 percent from the year-ago period. Its shares fell more than 1 percent at the start of trading Tuesday.

  • HSBC was the best performing stock in the benchmark European index. Its shares rose more than 6 percent after it reported a steep drop in profit but said it had lowered its provision for losses on loans and would expand its cost-cutting plan. HSBC also said it would consider paying a dividend next year after suspending it this year.

  • BP rose 1.7 percent after the energy company reported a small swing back to profit in the third quarter, compared with steep losses in the previous quarter. BP said it had “significantly lower” results in its oil trading business and the pandemic continued to make energy demand volatile.

Credit…Evan Agostini/Invision, via Associated Press

Sesame Workshop, the nonprofit organization that makes popular children’s TV series like “Sesame Street” and “Esme & Roy,” named a new leadership team on Tuesday.

Jeffrey D. Dunn, the chief executive of Sesame Workshop since 2014, will step down next year and will be replaced by Steve Youngwood, the organization’s chief operating officer. Sherrie Westin, the head of Sesame Workshop’s philanthropy division, will become president.

When Mr. Dunn took over as chief executive six years ago, Sesame Workshop was confronting a steep revenue decline. The videocassette and DVD market — once a primary source of funding — was collapsing as viewers turned to streaming video.

In the last few years, Sesame Workshop has aggressively expanded the number of shows it produces and has made deals with streaming power players, including HBO Max (the home of first run episodes of “Sesame Street” and “The Not-Too-Late Show with Elmo”) and AppleTV+ (“Helpsters,” “Ghostwriter”). Mr. Youngwood, 51, played a key role in making those deals.

Credit…Jeenah Moon for The New York Times

The coronavirus pandemic, which has focused greater attention on health care and spurred a heated race for a Covid-19 vaccine, has also ratcheted up interest in life science real estate in New York.

The city had already been trying to play catch-up with other life science powerhouses such as Boston, San Diego and San Francisco. Real estate companies, with government support, had been building commercial laboratories for medical researchers, incubator spaces for biotech start-ups and offices for pharmaceutical companies poised to bring new drugs to market.

Now, funding from investors is flowing to such projects at a time when the city’s office market is battered by lockdowns and orders to work from home. Developers are jumping on the life science bandwagon, which has emerged as a bright spot in an uncertain picture for commercial real estate:

  • Office availability in Manhattan jumped to 14.1 percent in the third quarter from 11.8 percent in the same period a year ago, while the average rent dropped about 1 percent, according to Newmark, a commercial real estate advisory firm.

  • Rent for labs in Manhattan averages around $105 a square foot, according to a report from CBRE, a real estate services company.

Governmental initiatives were established to encourage such efforts, which promise high-paying jobs and tax revenue. In 2016, New York introduced a $500 million life science initiative, led by the city’s Economic Development Corporation. In 2017, New York State unveiled its own $620 million plan.

“We think this is a game-changing point in New York,” said Matthew Weir, a senior vice president at Taconic Investment Partners, which announced plans to convert a former auto showroom on the West Side of Manhattan into a life science hub.

Credit…Walker Pickering for The New York Times

Even as businesses around the world shut down this spring, executives at EDF Renewables were hopeful they would finish installing 99 wind turbines in southern Nebraska before a year-end deadline. Then, in early April, the pandemic dealt a big blow to the company.

A manager at a factory that was building the giant cylinders on which the turbines sit had died of the coronavirus, shutting down the plant. That and other setbacks — including construction workers at the site in Nebraska contracting the virus — have hampered EDF’s efforts to finish the $374 million project by the end of the year.

The American Wind Energy Association estimates that the pandemic could threaten a total of $35 billion in investment and about 35,000 jobs this year. The losses could grow if the coronavirus continues to disrupt the economy well into next year.

“Every part of the supply chain has been hit by this,” said John Hensley, the wind association’s vice president of research and analytics.

Wind turbines provide more than 7 percent of U.S. electricity and are the largest carbon-free energy source after nuclear power plants. Nebraska gets about 20 percent of its electricity from wind, and when it is complete, EDF’s project will have the capacity to meet the electricity needs of about 115,000 homes.

The wind energy business was growing about 10 percent a year before the pandemic. But industry officials now fear that projects under construction may be postponed or canceled. The industry had hoped Congress might provide aid to renewable energy, but it got little from the stimulus bills passed in the spring.

The industry did receive some help from the Treasury Department, which in May gave wind energy developers more time to complete construction in order to qualify for a federal tax credit. Businesses now have to finish projects they began in 2016 and 2017 within five years, up from four years previously.

Credit…Desiree Rios for The New York Times

There’s an unlikely silver lining to the recession that set in eight months ago: Despite the economic devastation, which tipped millions of people into unemployment, many American households are in relatively good shape, The New York Times’s Stacy Cowley reports.

  • Since April, consumer savings have increased, credit scores have surged to a record high and household debt has dropped.

  • The billions of dollars that banks set aside at the start of the crisis to cover anticipated losses on loans to customers have been largely untouched.

  • And lending at pawn shops and payday lenders, where business tends to boom during downturns, has been unexpectedly slow.

The pain may still be coming. Banks and other consumer lenders are bracing for financial stress next year, as millions of people remain out of work and the labor market’s rebound shows signs of stalling. But for now, households are weathering the turmoil largely because of the unusual nature of the current downturn.


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