Burger chain Jack in the Box exploring sale: Report
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Nov 29 (Reuters) - Jack in the Box Inc, a U.S. hamburger restaurant chain with more than 2,000 restaurants, is exploring options that could include a sale of the company after divesting its Qdoba brand earlier this year, people familiar with the matter told Reuters on Thursday.
A sale would be the latest in a series of deals in the fast food sector this year, including the sale of drive-in burger chain Sonic to Arby's owner Inspire Brands for about $1.57 billion.
Jack in the Box started talks with potential buyers this month, including private equity firms, the sources said. There is no certainty that any deal will be reached, added the sources, who asked not to be identified because the matter is confidential.
Jack in the Box did not immediately respond to a request for comment. Its shares rose 6.6 percent on the news to $89.14 on Thursday afternoon, giving it a market capitalization of $2.3 billion.
Jack in the Box has been grappling with decreased consumer demand for fast food, as well as with higher wages for its workers.
It has been investing more in marketing and has updated its menu to include items such as the "Cholula Buttery Jack" and Teriyaki bowls. It beat revenue estimates in its two most recent earnings quarters, following a string of misses.
The company has also had to contend with dissatisfaction from its own operator base, the National Jack in the Box Franchisee Association, which last month demanded the company replace CEO Lenny Comma, saying the 2,240-outlet company's current strategy was harming its 2,000 franchise-owned restaurants.
Jack in the Box reached a settlement with activist hedge fund Jana Partners last month, agreeing to expand its board and give Jana a say over who fills two board seats.
Earlier this year, Jack in the Box sold its Qdoba Restaurant Corp unit, which operates and franchises more than 700 Qdoba Mexican Eats restaurants, to private equity firm Apollo Global Management LLC for about $305 million cash. (Reporting by Joshua Franklin and Harry Brumpton in New York Additional reporting by Liana B. Baker in New York Editing by Bill Rigby and Matthew Lewis)