Panera and Union Square Hospitality Group’s special purpose acquisition company (SPAC) have called off a merger that would’ve taken the sandwich chain public. 

The two sides had until June 30 to make their move. Instead of extending the partnership past the deadline, Union Square and Panera opted to end the deal completely due to “deteriorating capital market conditions.” A number of financial agencies have warned of an upcoming recession in the U.S. 

“Based on current capital market conditions, it is unlikely that an initial public offering for Panera will happen in the near-term, and so we have agreed not to extend our partnership beyond its existing June 30 expiration date,” Danny Meyer, chairman of the SPAC and founder of Union Square, said in a statement. “We are disappointed that market timing was not on our side, especially as we have such tremendous admiration and respect for Panera, its entire management team and their partners at JAB.”

USHG Acquisition Corp. launched in February 2021 looking for deals in technology, e-commerce, food and beverage, health and retail, or consumer goods. Shake Shack CEO Randy Garutti and former Whole Foods CEO Walter Robb serve as board members. In November, it was announced that Panera Brands—a recently created platform featuring JAB Holding fast casuals Panera, Caribou Coffee, and Einstein Bros. Bagels—would go public, with an investment from the special purpose acquisition company. Meyer also planned to directly invest and become a lead independent director following the IPO’s completion. 

The SPAC will turn its attention toward finding another partner with consistent values and one driven by an employee-first culture. 

“[The special purpose acquisition company] was proud to co-create a unique structure that provided substantial benefits and significant optionality to our shareholders,” CEO Adam Sokoloff said in a statement. “As we begin our search for a new partner, we will use our broad business network and strategic operating experience to engage with market-leading companies led by forward-thinking management teams. We are open to exploring a variety of creative structures that maximize long-term value for all stakeholders.”

Panera Brands combines nearly 4,000 locations and 110,000 employees across 10 countries. Each restaurant is owned by JAB, which purchased Panera for $7.5 billion in 2017, Caribou for $340 million in 2012, and Einstein Noah Restaurant Group for $374 million in 2014. 

For restaurants, 2021 marked one of the busiest IPO years in recent memory, with Krispy Kreme, Dutch Bros, Sweetgreen, First Watch, and Portillo’s making the leap. MOD Pizza and Fogo de Chão announced intentions last year, but have not done so. 

Fast Casual, Finance, Story, Caribou Coffee, Einstein Bros. Bagels, Panera Bread