Pancake House resumes talks on planned buyout of Goldilocks

By Zinnia B. Dela Peña
The Philippine Star 06/22/2006

Listed restaurant chain Pancake House Inc. said yesterday it has resumed talks on its planned purchase of Goldilocks Bakeshop Inc. but pointed out that negotiations remain at the exploratory stage.

In its disclosure to the Philippine Stock Exchange, Pancake House said should any investment be made, "it is likely that Pancake House shall take the lead in the transaction which will include negotiations with the target company, fund raising, due diligence, etc."

Owned by the Go family, the Goldilocks chain of bakeshops has 192 outlets in the Philippines, 17 in the United States and one in Canada.

The Go family could not be reached for comment as of presstime.

Late last year, however, they said they were intent on keeping and further growing the business they built over the past 40 years.

In fact, for this year, Goldilocks has set aside P500 million for the construction of 15 to 20 new outlets in the Philippines and another two or three branches in the US.

The capital budget will also go to the construction of a commissary in the US East Coast.

Goldilocks president Freddie Go had said that should the company decide later on to enter into a strategic partnership, it would send the word out to prospective companies.

Awash with P4.7 billion in cash from the sale of its 22-percent stake in Singapore-listed Del Monte Pacific Ltd., the Lorenzo family which owns Pancake House, has held exploratory talks with the owners of Goldilocks since 2002, but negotiations had been an on-and-off thing.

In a note to clients, ATR-Kim Eng Securities Inc. said Pancake House had offered to buy Goldilocks for P2 billion or about P9.5 million for each store.

The offer was said to be good for 90 days.

The same research note said one of the two major families that own Goldilocks has already given its green light to the P2-billion offer.

A number of companies have expressed interest to acquire Goldilocks given the bakeshop’s strong track record and impressive growth through the years.

Goldilocks offers various kinds of cakes and pastries like ensaymada, chicken pie, meringue tart, cinnamon roll, brownies and jellyroll.

Goldilocks’ closest rival Red Ribbon had been acquired by fastfood giant Jollibee Foods Corp. last year.

The Lorenzos earlier said they were also impressed with the rapid growth of Julie’s Bakeshop, the country’s biggest neighborhood bakery network.

Pancake House is bent on expanding its businesses to further strengthen its foothold in the casual dining industry.

It has earmarked P50 million for the establishment of a commissary for its Dencio’s Grill restaurant and Japanese restaurant Teriyaki Boy.

The new commissary, to be located in Makati, is seen to cut costs and enhance operational efficiencies of both Dencio’s and Teriyaki Boy as it will consolidate both restaurants’ commissaries which are currently located in Mandaluyong and Pasig, respectively.

Bullish on the growth of casual fastfood restaurants in the country, Pancake House plans to further beef up its branch network.

By 2007, the group is expected to have a total of 126 stores, 74 of which would be Pancake House, 30 Dencio’s and the remaining 22 Teriyaki Boy.

Pancake House has traditionally been associated with specialty pancakes and waffles but has expanded to offer an array of popular international dishes such as spaghetti, tacos, chicken and even steaks.

 

http://www.philstar.com/philstar/news200606220701.htm