Foodtastic's $720M MTY Bid Rejected; New CEO Installed Instead

MTY Food Group has rejected a takeover bid from Foodtastic valued at roughly $720 million, or CA$43 per share — a premium Bloomberg pegged at about 32% over the market price. The offer, disclosed Wednesday by Foodtastic, covered the Montreal-based parent of Cold Stone Creamery, Papa Murphy's, Wetzel's Pretzels and Baja Fresh.

Foodtastic, itself a major Canadian restaurant operator, called the acquisition "achievable in short order" in a Wednesday press release. CA$43 equals almost US$31 per share.

The refusal was not a snap decision. MTY said Tuesday it had completed a strategic review of its business plan, a process that began last year, and concluded that a sale to Foodtastic was not in its best interest.

What did MTY decide instead?

The conglomerate disclosed that in October it declined to pursue multiple acquisition offers from Foodtastic. This week it appointed board chair Victor Mandel to replace Eric Lefebvre as CEO. It then terminated negotiations with Foodtastic entirely.

MTY said it will press ahead with its current strategic plan, which emphasizes efficiency, simplification and disciplined capital allocation — a roadmap built for margin defense rather than for a change of ownership.

Why is Foodtastic criticizing the board?

Foodtastic fired back Wednesday, expressing surprise at Mandel's elevation. It backed the objection with a number: "During [Mandel's] Board tenure, MTY's total shareholder return has been approximately -37%," the company claimed.

The would-be acquirer attributed the bid's collapse to a valuation gap, not to financing. "[MTY] had unrealistic expectations about its value," Foodtastic said in a statement. "MTY never agreed to a transaction that reflected what we view as fair value, based upon the prospects for MTY's business."

On financing, Foodtastic took a defensive posture. It said it would not ask MTY's shareholders to vote on a deal unless sufficient financing was already in place.

Where does the dispute leave both operators?

The standoff now rests on two irreconcilable views of what MTY is worth. Foodtastic sees roughly a third of upside for shareholders at CA$43; MTY's board sees more value in independence, a new chief executive and a plan built on efficiency and disciplined capital allocation.

With negotiations terminated and a leadership change already executed, the next move belongs to either Foodtastic — which could appeal directly to shareholders — or to Mandel, whose tenure begins under public pressure to prove the board's valuation judgment correct.