Private equity firm 3G Capitol is set to acquire the number two fast-food hamburger chain in the United States, Burger King. According to a spokesperson from Burger King Holdings Inc, the company is selling itself in a deal for $3.26 billion.
In recent years, profits for the hamburger giant began to decline leading to the buyout by TPG, Inc, Bain Capital, LLC and Goldman Sachs in 2002 from Diagleo PLC. According to Bloomberg, the trio still owns about one third of the company’s outstanding shares, but are willing to tender the stock for buyout. Efforts to begin acquisition of the outstanding shares will begin by September 17.
After the potential deal was rumored, Burger King’s shares increased to an 18-month high, resting at $23.60 at the close of the on Friday. On Thursday, 3G Capital offered a deal of $24 per share, which was 46% over the premium price of $18.86. Theories are swirling amongst financial analysts of an increased buyout price due to the unexpected increase in share price.
Burger King’s number one competitor still remains McDonald’s, Inc. Although Burger King still holds the number two spot in the United States, the flame-broiled concept is no longer solely identified with just Burger King. Smaller competitors have captured market shares that widened that gap between Burger King and McDonald’s. Currently Burger King has a market value of more than $2.2 billion.