Is Nathan's Famous for sale?

"Iconic" CPG brand - strategic value might be more than the market thinks

These comments were inspired by Mario Gabelli’s X post below. News that Nathan’s Famous (NATH) is considering a sale was reported in the Financial Times yesterday.

My first Substack article on NATH (8/2022) can be found here. It provides a good overview of the business.

Last December I guessed that the recent Smithfield IPO might lead to NATH being acquired:

“Iconic” CPG brand

Contrary to common perception, NATH is not primarily a restaurant business. The Nathan’s Famous brand is one of the leading CPG brands in its market segment via their grocery licensing business. NATH hot dogs/other products have had above-industry growth as reflected by the growing royalty stream paid to Nathan’s Famous (~7.8% average growth rate over the past 8 years).

It is for this reason that I believe NATH’s strategic value could be far higher than the market thinks - and that the most logical buyer is Smithfield.