Goldman Sachs arm joins list of bidders for $10bn Subway chain

The world-famous sandwich chain Subway has been put up for sale with a $10 billion price tag, and one of the potential buyers is an arm of Wall Street titan Goldman Sachs.

According to media reports, a few parties have submitted indicative offers for Subway this week, including Goldman Sachs Asset Management (GSAM).

Bain Capital, TDR Capital, which co-owns Asda and the massive EG Group of gas stations, as well as US private equity firm TPG were also said to have expressed interest, according to people familiar with the process.

Brewdog is one of the companies in which TSG Consumer Partners has investments, so it is also said to be keeping an eye on the situation.

Weeks after the family-owned sandwich chain announced it was considering a sale, a list of potential buyers for Subway has surfaced.

The first Subway restaurant was established by nuclear physicist Peter Buck in Connecticut in 1965.

Since then, it has expanded to become one of the largest quick-service restaurant chains in the world, with 37,000 locations—mostly franchised—in more than 100 nations.

In the UK, Subway operates more than 2,000 locations and provides made-to-order salads, wraps, and sandwiches.

Compared to rivals like McDonald’s and Greggs it has more locations in the UK.

According to the Wall Street Journal, a sale could fetch $10 billion or more for the company, though the specifics of any agreement are still unknown.

The business acknowledged last month that its shareholders were “exploring a potential sale of the company”.

​It said in a statement: “The company recently announced another record-setting year, ending 2022 exceeding global sales projections and achieving eight consecutive quarters of positive same-store sales growth.”

A number of other bidders are said to have expressed interest and JP Morgan bankers are directing the sale process.

Some of the initial bidders may look to form partnerships with one another or with investors in their private equity funds because a takeover at $10 billion would be too big for some of them to complete on their own.

Given that Goldman participates in so few auctions of this kind, the fact that it has emerged as a potential buyer of Subway is intriguing.

Its interest is channelled through GSAM, a division formerly known as its Principal Investment Area (PIA).

While TDR has experience in the industry as the owner of several food-service brands, Bain was one of the bidders for Boots, the chemist, when its owners pursued an unsuccessful sale last year.

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