The Restaurant-Takeover Rumor Parade -- Why Morton's, Red Robin and Jamba Made the Grade

There's been such a flurry of acquisitions of restaurant chains in the past few months -- including Wingstop, On the Border, and Papa Murphy's -- that the industry rumor mill has cranked into overdrive on which brands will be snapped up next. Among the prime nominees are Jamba Juice parent Jamba Inc. (JMBA), Morton's Restaurant Group (MRT), Red Robin Gourmet Burger (RRGB), McCormick & Schmick's Seafood Restaurant (MSSR), all nominated by Jefferies & Co. analyst Jeff Farmer; and Jack in the Box (JACK), recently named by Stifel Nicolaus analyst Steve West.

Shares of some of these companies have been inexplicably rising in recent months, ever since the announcement that Carl's Jr. and Hardee's owner CKE Restaurants (CKR) was being sold, leading Farmer to speculate that investors are salivating over a possible sellout.

Here's these chains make juicy takeover targets:

• Morton's steakhouses are getting hammered by the downturn, along with archrival Ruth's Chris Steakhouse (RUTH). Morton's sales at established stores plummeted 22 percent in recent months. Ruth's could find itself on a private-equity firm's takeover menu too, but hey, its comparable-store sales were only down half as much. Morton's also lost its longtime CEO suddenly in February, hastily promoting a regional manager to the top slot.
• Twenty-year-old smoothie chain Jamba Juice is in turnaround mode after sales fell 12 percent last year and losses continued. Efforts to grow sales through new food offerings have yet to gain traction. The company had to "refranchise" 27 stores last year -- code for finding new buyers for Jamba units where the existing franchisee had gone bust.
• Red Robin's recent performance has been so lackluster that rebellious shareholders persuaded the company to look for a new CEO last month. Essentially headless chains are always prime targets.
• Falling sales, and $85 million in losses over the past two years make McCormick & Schmick's vulnerable. Comparable-store sales were down nearly 16 percent last year. Right now, Red Lobster it ain't.
• The odd chain out in a world of fast-food conglomerates, shrinking Jack in the Box and subsidiary Qdoba might be better off in the arms of a bigger player such as KFC/Taco Bell/Pizza Hut owner Yum! Brands (YUM), which excels at international growth.