Domino’s Pizza – Still a Hot Franchise?

January 29th, 2011

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SAC Takes a Slice of Domino’s


 Steven Cohen’s hedge fund, SAC Capital, disclosed on Monday that it had acquired a 5.3 percent stake in Domino’s Pizza Franchise.

While it is a passive investment, the news caused Domino’s shares to rise more than 2 percent in after-hours trading.

The filing comes at a time of renewed investor interest in fast-food chain franchises, as the economy slowly improves and as deal makers perceive value, as highlighted by 3G Capital’s deal for Burger King in September.

SAC now owns 3.19 million shares of Domino’s Franchise, making it the fifth-biggest shareholder. The biggest is the private equity firm Bain Capital, which bought Domino’s Franchise from its founder, Tom Monaghan, in 1998 for a reported $1 billion. After taking the company public in 2004, Bain now has a 13.65 percent stake, according to Thomson Reuters data.

Domino’s Franchise, based in Ann Arbor, Mich., operates a network of nearly 9,000 company-owned and franchise pizza shops nationwide.

Mr. Cohen’s passion for pizza has been noted before. According to a New York Post Page Six item in January 2006, Mr. Cohen was seen buying a pie from Pizza 33 on East 33rd Street and Third Avenue, using an American Express “black card,” the ultra-elite Centurian charge card.

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