Franchisor MTY Food Group to buy back shares, hike dividend after few potential buyers emerge

MTY Food Group Inc. MTY-T says a strategic review found few possible acquisition targets offer the value the restaurant franchisor wants, so it will instead buy back shares and pay an increased dividend.

The Montreal-based company behind Thai Express, Manchu Wok, Mr. Sub and scores of other brands says it will restore its normal course issuer bid and will consider a substantial issuer bid.

These bids typically see publicly traded companies repurchase their own shares to cancel them and thus, return value to shareholders.

At the same time, MTY plans to increase its quarterly dividend to 50 cents per share from 37 cents per share.

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It says it will also work to optimize its portfolio of brands, become more asset-light when franchising and streamline its operations.

MTY revealed its plans almost a year after launching a strategic review last November that it once warned could result in a sale of the company. MTY reported third-quarter net income attributable to owners today of $24.8-million, or $1.08 per diluted share, compared with $27.9-million, or $1.22 per diluted share, a year earlier.