Suitor Takes Partner, Bids for Dunkin’ Donuts

Unicorp Canada, spurned last month in a bid to buy Dunkin’ Donuts, took on a partner Thursday and launched a $305.3-million hostile tender offer for the doughnut store chain.

Unicorp and another Toronto-based firm, Cara Operations Ltd., offered $43 a share for Dunkin’ Donuts, which has said it wants to remain independent and set up a series of defensive steps.

Dunkin’ Donuts Vice President and Treasurer Richard N. Hart Jr. said the company would have no comment on the latest offer.

Investors appeared noncommittal about the Unicorp-Cara bid. Dunkin’ Donuts stock was up 12.5 cents a share to $39.75 in over-the-counter trading Thursday afternoon.

Unicorp, a real estate, banking and energy firm controlled by Toronto investor George Mann, previously indicated that it might try to buy the doughnut chain on its own. Since December, it has built up a 12% stake in the company, which has 7.1 million shares outstanding.

Last month, Unicorp proposed a friendly $42-a-share, or $298.2-million, buyout that Dunkin’ Donuts rejected.

$13.5-Million Profit

Unicorp and Cara, a food service company that has franchised more than 500 restaurants, said their offer expires July 13 and is conditioned on obtaining at least 75% of Dunkin’ Donuts’ stock.

Dunkin’ Donuts, based in Randolph, Mass., has franchised more than 1,700 doughnut shops worldwide and reported profit of $13.5 million on sales of $112.8 million last year.

After Unicorp’s merchant banking arm, Kingsbridge Capital Group, began buying large numbers of shares last spring, Dunkin’ Donuts began to shore up its takeover defenses, creating a “poison pill” shareholder rights plan and an employee stock ownership plan.

Dunkin’ Donuts also announced plans to repurchase 1.4 million shares of its common stock and has sold 28,000 convertible preferred shares for $28 million to General Electric Capital Corp.

GE Capital is acting as a “white knight,” lending support to Dunkin’ Donuts management.