TORONTO/MONTREAL – MTY Food Group Inc. (TSE:MTY) finds itself at the center of intensifying acquisition interest while simultaneously rewarding current shareholders with a significant dividend increase, signaling strong confidence in the company’s cash-generating capabilities amid a potential sale.
Multiple Bidders Push Valuations Above C$52 Per Share
The Canadian restaurant franchisor is currently engaged in advanced acquisition talks, with Serruya Private Equity leading discussions with a cash offer of approximately C$52 per share, according to sources familiar with the matter revealed Tuesday.
The proposed deal would value MTY at a substantial premium of roughly 30% above its recent trading price of around C$40 per share, reflecting strong investor confidence in the company’s franchise-driven business model despite sector-wide challenges.
The acquisition process has attracted several high-profile bidders beyond Serruya Private Equity. Recipe Unlimited Corporation (TSE:RECP), the parent company of Swiss Chalet, Harvey’s, and The Keg, has reportedly submitted a competing bid exceeding C$53 per share. Industry sources indicate at least one additional bidder remains in the running, raising the possibility that final offers could reach the high C$50s per share range as the competitive auction intensifies.
Strategic Review Underway
MTY, which operates and franchises more than 6,500 restaurant locations globally, previously disclosed it was actively exploring strategic alternatives, including a potential sale, to maximize shareholder value. The company’s diverse portfolio includes popular brands such as Thai Express, Mucho Burrito, Papa Murphy’s, Cold Stone Creamery, and Pinkberry.
The strategic review comes as the casual dining sector faces mounting pressures from rising labor and food costs, declining consumer spending, and elevated interest rates – factors that have compressed valuations across the restaurant industry while simultaneously attracting private equity interest.
Dividend Increase Signals Cash Flow Strength
Even amid acquisition talks, MTY delivered positive news to shareholders with a 12% increase to its quarterly dividend payment. The Montreal-based restaurant franchisor will pay 37.0 cents per share on February 13, up from the previous 33.0 cents, with a record date of February 3, 2026.
This marks the 13th dividend increase since MTY first introduced quarterly payments in November 2010, when shareholders received just 4.5 cents per share. The consistent growth demonstrates the company’s ability to generate reliable cash flows across its global portfolio of restaurant brands.
“This 12% dividend increase underscores the Board of Directors’ confidence in MTY’s ability to generate sustainable cash flow and deliver long-term value,” said Eric Lefebvre, Chief Executive Officer. “It demonstrates our disciplined approach to capital allocation—returning cash to shareholders while maintaining the flexibility to invest in growth.”
Serruya’s Strategic Fit
Founded by the Serruya family, Serruya Private Equity has built a reputation for investing in consumer, retail, and restaurant businesses, with particular expertise in ice cream brands, casual dining concepts, and franchised platforms across North America and internationally.
The firm’s investment strategy focuses on acquiring established brands with predictable cash flows and scaling them through operational efficiencies and international expansion. An MTY acquisition would align perfectly with Serruya’s preference for asset-light, franchise-driven models that generate recurring royalty revenue.
One source familiar with Serruya’s investment approach noted that MTY’s diversified brand portfolio, recurring royalty revenue, and global footprint make it a natural fit for private ownership, where longer investment horizons and operational restructuring can be pursued outside the scrutiny of public markets.
Market Response and Industry Impact
MTY shares have risen from recent lows amid growing market speculation over a potential transaction. The stock’s upward momentum reflects investor optimism about the premium valuations being discussed in the bidding process, while the concurrent dividend increase demonstrates management’s commitment to shareholder returns regardless of the acquisition outcome.
The heightened interest in MTY underscores broader trends in the restaurant sector, where private equity firms and strategic buyers are targeting established franchise operators with stable cash flows and growth potential through operational improvements.
What’s Next
While discussions remain ongoing, no final agreement has been reached between any parties. The competitive nature of the bidding process suggests a resolution could emerge in the coming weeks, with the potential for escalating offers as bidders seek to secure the deal.
Current shareholders stand to benefit regardless of the outcome – either through the substantial premiums being offered in the bidding process or through continued ownership of a company demonstrating strong cash generation and a 15-year track record of dividend growth.
Neither MTY Food Group, Serruya Private Equity, nor Recipe Unlimited immediately responded to requests for comment on the ongoing negotiations.
The outcome of this acquisition battle will be closely watched by industry observers as a barometer for valuations in the Canadian restaurant franchising sector and private equity appetite for consumer-facing businesses in the current economic environment.
Sources:
https://www.globenewswire.com/news-release/2026/01/21/3222659/0/en/MTY-Increases-Its-Quarterly-Dividend-by-12.html
https://www.tipranks.com/news/company-announcements/mty-food-group-raises-quarterly-dividend-by-12
https://www.radiotandil.com/noticias-internacionales/1556/mty-food-group-attracts-multiple-bidders-in-potential-c52-per-share-sale/
This story is developing and will be updated as new information becomes available.
