Burger King to go public for second time

BURGER KING is going public. Again.

Just 18 months after being taken private in a leveraged buyout, Burger King Worldwide Holdings, one of the world’s largest fast-food chains, plans to list its shares on the New York Stock Exchange through a merger with Justice Holdings, an investment company based in London.

Under the terms of the deal, 3G Capital, the little-known buyout shop that bought Burger King in 2010, will receive about $US1.4 billion in cash and continue to own about 71 per cent of the company. Justice Holdings will own the rest.

The transaction, announced on Tuesday, was unexpected, as private equity firms generally prefer to fix businesses outside of the public glare. 3G was trying to turn around the struggling chain in the US.

Burger King’s complex deal would be the second time in less than a decade that the restaurant chain has been acquired by a private equity firm and then taken public.

In 2002, a group of buyout shops – TPG, Bain Capital and Goldman Sachs’ private equity unit – bought the company for $US1.58 billion. The owners then took Burger King public again in 2006.

3G Capital’s acquisition of Burger King for about $US3.3 billion in 2010 was also a surprise. The firm is backed by Brazilian investors, including the billionaire Jorge Paulo Lemann, who was best known for his role in the $US52 billion merger of the Brazilian-Belgian beer company InBev with Anheuser-Busch.

Justice Holdings is an investment vehicle controlled by the financiers Martin Franklin and Nicolas Berggruen. The hedge fund manager William Ackman is also an investor and his fund, Pershing Square Capital Management, is expected to own 10 per cent of Burger King.

The New York Times

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