Canadian restaurant franchisor MTY Food Group has reported a significant turnaround in its latest quarterly results, swinging from a loss to a profit of $32.1 million — though analysts say the recovery was largely fuelled by a one-off accounting gain rather than underlying growth.
The results, however, may be overshadowed by something far bigger: a full-blown bidding war for the company itself.
Sources close to the negotiations say MTY has attracted multiple high-profile suitors, with Serruya Private Equity leading discussions at a cash offer of approximately C$52 per share — a premium of roughly 30% above where the stock was recently trading. But Serruya may not have the final word. Recipe Unlimited Corporation, the Toronto-listed parent of Swiss Chalet, Harvey’s, and The Keg, has reportedly submitted a competing bid exceeding C$53 per share, intensifying what insiders describe as a competitive auction that could yet push offers into the high C$50s.
MTY confirmed in November that it had initiated a formal strategic review and engaged a financial adviser to explore options including a potential sale.
On the financial results themselves, the Montreal-based company — which operates more than 7,000 restaurant locations across North America — said earnings per share reached $1.40 for the fourth quarter of its 2025 fiscal year, compared with a loss recorded in the same period a year earlier.
Much of the improvement, however, came from a catch-up in so-called gift card breakage income — revenue recognised from gift cards that customers never redeem. Stripping that out, the broader picture is more modest. System-wide sales grew by around 3%, a figure itself flattered by an additional trading week in the calendar. Sales at established locations fell by 1.7%.
MTY said it opened a net 19 new locations during the quarter, bringing its total network to 7,080 stores. Management described trading conditions in Canada as stable, but acknowledged softer performance in the United States, where consumers have remained cautious amid a difficult economic environment.
On the positive side, free cash flow rose 38% and the group continued to reduce its long-term debt — a priority for a business that analysts have flagged as carrying relatively high levels of leverage.
The company’s core appeal to potential buyers lies in its asset-light franchise model, which generates royalties and fees without owning the restaurants themselves — a structure that produces reliable cash flow even under consumer pressure, and one that both Serruya and Recipe Unlimited are understood to find attractive.
Neither MTY, Serruya Private Equity, nor Recipe Unlimited has commented publicly on the ongoing negotiations. Analysts currently rate the stock a Hold, with a consensus price target of C$45 — already well below the figures reportedly being discussed behind closed doors.
