Denny’s Goes Private in $322 Million Deal Amid Market Challenges

New York, NY — Denny's, the American diner chain, has announced it will go private in a deal estimated at $322 million. This transaction is part of an agreement with TriArtisan Capital Advisors, a private equity firm known for its stake in P.F. Chang's, and Yadav Enterprises, a significant Denny’s franchisee.

The Denny’s board approved the deal on Monday. If shareholders accept the offer, Denny’s stock will be delisted from the Nasdaq, concluding almost 60 years of being publicly traded. Following the announcement, shares soared by 50% during early trading on Tuesday, although they had dropped about a third of their value earlier in the year.

CEO Kelli Valade stated, “This transaction maximizes value and is in the best interests of stockholders, representing the best path forward for the company.” Denny’s evaluated offers from over 40 potential buyers before settling on this deal.

While historically successful for its 24/7 availability, Denny’s has seen operational challenges since the pandemic temporarily altered its dining hours. Currently, about a quarter of its 1,600 locations have yet to resume around-the-clock service. The company has also faced stiff competition from newer chains like First Watch as customers shift toward eating at home in a bid to save money.

In recent years, Denny’s has tried to revitalize its brand with remodeled restaurants and new menu items. However, sales at its established locations dropped by 2.9% in the latest quarter, and it has managed only 10 successful remodels.

Simultaneously, Yum! Brands announced it is exploring strategic options for Pizza Hut, which could include a sale. CEO Chris Turner commented on the need for additional actions to improve Pizza Hut’s performance, especially in a competitive market. Pizza Hut reported a troubling 6% decrease in same-store sales as it struggles against rivals like Domino's and Papa John’s.

The moves by Denny’s and Yum! Brands reflect ongoing challenges within the casual dining and fast-food sectors as both companies attempt to adapt to changing consumer preferences.