Owner to sell a slice of Domino's Monaghan expects to take company public this year.

February 28, 1992|By Doron P. Levin | Doron P. Levin,New York Times News Service

DETROIT B — DETROIT -- Tom Monaghan, the entrepreneur who owns Domino's Pizza Inc., has decided to sell stock in his company to the public later this year, the company said yesterday.

Accordingly, Mr. Monaghan, who now serves as Domino's president, is cleaning up Domino's balance sheet to make the company more attractive to investors by writing off bad loans and selling Domino's assets not related to pizza.

He also plans to sell the Detroit Tigers baseball team, which he owns separately from Domino's.

While Mr. Monaghan, who owns 98 percent of Domino's, initially expects to retain majority ownership and remain as president, the offering could make the pizza chain one of the largest publicly owned fast-food operations in the nation, smaller than McDonald's but in the same league with Wendy's in terms of capitalization, said John McDevitt, the chief financial officer of Domino's, which is based in Ann Arbor, Mich.

The decision to take Domino's public and sell the baseball team was motivated by "estate planning considerations," said Mike Jenkins, a Domino's spokesman. Mr. Monaghan, who declined to be interviewed, is married, has four daughters and is 54. Two years ago, he put Domino's up for sale for $1.2 billion but got no takers.

Goldman, Sachs & Co., Domino's investment bank, is advising Mr. Monaghan on the sale of his stock. Mr. McDevitt said that Goldman, Sachs and the NBD Corp., which owns the holding company for Detroit's biggest commercial bank, would handle the sale of the Tigers.

Analysts say the market environment for restaurant stocks was favorable. Shares in restaurant companies are generally performing well, and chains that offer low-priced, good- value meals are relatively recession-proof, one analyst said.

Still, many questions remain about Domino's. Michael G. Mueller, a restaurant analyst with Montgomery Securities in San Francisco, said he would be curious to know Domino's strategy for long-term growth in the intensely competitive pizza business. More fast-food companies are offering pizza, and fancy pizza is also growing in popularity, he said.

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