Goldman to Join TDR’s Subway Bid to Rival Frontrunner Roark

TDR Capital and Sycamore Partners have brought in Goldman Sachs Group Inc.’s asset management arm as they make a last-ditch effort to beat out frontrunner Roark Capital Group in the bidding for sandwich chain Subway, people with knowledge of the matter said.

(Bloomberg) — TDR Capital and Sycamore Partners have brought in Goldman Sachs Group Inc.’s asset management arm as they make a last-ditch effort to beat out frontrunner Roark Capital Group in the bidding for sandwich chain Subway, people with knowledge of the matter said. 

TDR has also drafted in sovereign wealth fund Abu Dhabi Investment Authority, according to the people. Final bids were submitted by Roark and the TDR-led group on Tuesday and a decision on the winner could come as soon as today, they said, asking not to be identified discussing confidential information.

Roark is considered the favorite to acquire Subway for more than $9 billion. It’s lined up a slew of financing banks to provide as much as $5 billion in funding, with the rest in equity, as it tries to negotiate a purchase agreement, some of the people said. But the TDR-led group is still pushing to come out on top, they said. 

The situation remains fluid, the people said. Representatives for Subway, Goldman, Sycamore, ADIA and TDR declined to comment. A representative for Roark didn’t immediately respond to requests for comment. 

The Wall Street Journal reported on Monday that Roark was in advanced talks to acquire Subway for around $9.6 billion and looking to finalize a deal this week. Axios later reported that the founding family hasn’t yet picked a buyer.

Earlier in the process, Goldman had teamed up with private equity firm Advent International, Bloomberg News previously reported. 

Subway is one of the world’s largest restaurant chains with about 37,000 franchise-run locations in more than 100 countries. Subway’s profitability has been squeezed as it spends money to overhaul stores to keep up with rivals that have been investing heavily to beautify locations and buildup their online capabilities. It’s also been grappling with stiffening competition from upstart sandwich chains such as Jersey Mike’s Subs.

–With assistance from Kamaron Leach and Aaron Kirchfeld.

(Updates with detail on ADIA in second paragraph. An earlier version of this story corrected a misspelling of Sycamore.)

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