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Is Restaurant Brands International Buying Popeyes?

The last 24 hours have been fairly interesting for Popeyes Louisiana Kitchen, as reports circulated that Restaurant Brands International Inc. was in talks with the company for a potential acquisition. And during that timeframe, it was reported that Restaurant Brand International walked away from the talks. So what’s really going on here?

In a report published Jan. 13 at 4:39 EST by Reuters, sources close to the matter noted that the parent company of Burger King and Tim Hortons approached Popeyes about a possible acquisition. Popeyes declined to comment, and Restaurant Brands International did not respond to a request for comment by the time Reuters published the report.

According to the sources, the deal would be a bet by Restaurant Brands International that it could use its international reach to expand Popeyes’ concept globally, giving diners across the world access to its Louisiana-style fried chicken and buttermilk biscuits. No deal price was published, and the source noted there was no certainty that negotiations would continue.

However, a report from the New York Post indicates Restaurant Brands International approached Popeyes in October and November 2016, but passed when Popeyes’ third-quarter results lifted its shares nearly 10% when they were released Nov. 9, 2016. The source noted that there is typically a window for such acquisitions, and intimated that the window had closed for Popeyes.

However, the source noted that Restaurant Brands International is looking for additional restaurant concepts for its portfolio, and is specifically targeting brands with a large U.S. presence and a smaller international footprint. It does not want a company that would compete with Burger King and Tim Hortons, leaving a possible acquisition open to chains that sell pizza, Mexican or chicken.

While Restaurant Brands International remains on the hunt, there seems to be a clear winner from the rumor: shares of Popeyes spiked more than 14% on Monday, Feb. 13, after Reuters published its reports, finishing with a 7% gain by the end of the day, according to CNBC. Restaurant Brands International wasn’t left in the dust, either: their shares rose 4.6% by end of trading Feb. 13.