Wall Street spent the week chewing on an unlikely merger theory: that Starbucks could end up buying Chipotle, the burrito chain once run by the coffee giant's current CEO.

The speculation traces back to a report from Semafor, which said Chipotle had quietly hired bankers to help fend off a potential takeover. Semafor's follow-up floated Starbucks as a theoretical suitor, built largely around the fact that Starbucks CEO Brian Niccol ran Chipotle until last year and spent more than a decade before that at Yum Brands, the parent of KFC, Pizza Hut and Taco Bell.

The pitch Semafor describes borrows from that Yum playbook: let Starbucks and Chipotle keep operating as separate, competing brands while sharing real estate and back-office functions. Newsquawk noted the idea is still just that — a theory, not a reported deal.

"HASN'T RECEIVED A TAKEOVER BID"

People close to Chipotle told Semafor the company "hasn't received a takeover bid" and said the chain was "loath to peddle in deal rumors." Starbucks declined to comment on the speculation, and Chipotle did not respond to a request for comment, according to the reporting.

Any real combination would face real obstacles. Semafor's analysis suggests Starbucks would likely trade at a lower earnings multiple after absorbing Chipotle and might need to issue new stock to finance a deal — a tough sell to a board still getting acquainted with a CEO it hired only last year.

Still, the chatter underscores how unsettled the fast-casual and coffee sectors have become amid slowing consumer spending, with activist investors increasingly circling restaurant chains they see as undervalued or mismanaged.