Dunkin' Donuts in US bidding battle

BRITISH food and drinks group Allied Domecq's Dunkin' Donuts subsidiary is poised to join the bidding for a US doughnut chain.

It aims to stop the chain falling into the hands of arch-rival Krispy Kreme or a competitor owned by burger giant Wendy's.

In the bitter fight for doughnut domination, Dunkin' Donuts has asked a Rhode Island bankruptcy court to delay the $35.5m sale of Bess Eaton Donut Flour to Canadian coffee shop chain Tim Hortons, owned by Wendy's.

Dunkin' Donuts wants time to look at Bess Eaton's books and decide whether to make an offer. Bess Eaton has 48 stores, mostly in Rhode Island, Massachusetts and Connecticut.

Analysts said Dunkin' Donuts was anxious to become involved in the bidding because The Jan Companies, a major operator of Krispy Kreme outlets, was also interested in Bess Eaton.

'An acquisition of Bess Eaton would place the successful bidder squarely in the middle of Dunkin' Donuts' home region,' said John Glass, restaurant analyst mwith investment firm CIBC World Markets.

Dunkin' Donuts, the global leader with 5,800 stores worldwide, has been feeling the pressure from Krispy Kreme and other chains.

The bankruptcy court is expected to finalise a sale of Bess Eaton by late April.