Burger King has been sold to private equity firm 3G Capital in a deal worth $4bn (US). The $24-a-share agreement is 46% more than Burger King shares closed at on 31 August, the day before rumours of a deal surfaced and sent the shares soaring by 15%.
Alex Behring, managing partner of 3G Capital, said: “We have great respect for the Burger King brand and the strong business that management, the employees and the franchisees have built. The brand, its solid franchisee network and great product offerings make this a perfect fit for 3G Capital, which has a strong track record of long-term investments in global consumer brands and retail companies.”
3G Capital has raised debt from JPMorgan Chase Bank and Barclays Capital to acquire the fast food chain, which has been hit hard by the global financial slowdown, with sales under pressure in the US from rising jobless numbers and declining consumer confidence.
Last week the company said worldwide sales this year were down 2.3%, compared with an increase of 1.2% last year. Sales in North America were down 3.9%. Bitter rival McDonald’s, however, has fared better: its global sales in the second quarter were up 4.8%, with US sales up 3.7%.
BK’s chairman and chief executive, John Chidsey, who will stay in his role during a transition period before becoming co-chairman with Behring, added: “We are committed to maintaining the superior guest experience the Burger King system is known for around the world as we transition ownership.”
The deal represents the second time the 55-year-old chain has been owned by buyout specialists after it was spun out of then owner Diageo in 2002 by Texas Pacific, Bain Capital and Goldman Sachs in a $1.5bn deal ( worth £950m at the time). They floated the company four years later but retained just under a third of the shares.
The deal also marks another example of Brazil’s increasing power as a corporate player. Behring is the right-hand man of fellow Brazilian Jorge Paulo Lemann, having previously worked at the buyout firm the 71-year-old billionaire founded. Lemann and three of his fellow directors at Anheuser-Busch InBev, the world’s largest brewer, are also directors of 3G.
Under the terms of the agreement, Burger King can solicit superior bids until 12 October.
Copyright 2010 The Associated Press