Burger King to be acquired by 3G Capital for $4.2 billion
03 Sep 2010
Burger King Holdings Inc, the second-largest hamburger chain after McDonalds, yesterday agreed to sell itself to investment firm 3G Capital that is backed by Brazilian investors, for $4 billion, including the assumption of debt.
At $24 per share, representing a premium of 46 per cent premium to Burger King's price before media reported about the potential sale on 31 August, (See: Burger King mulls sale to private equity firms: report), the deal is the largest leveraged buyout of a fast-food restaurant chain since a decade.
Under the terms of the deal, 3G Capital will pay $24 per share or $3.26 billion and assume Burger King's debt of $740 million, valuing the deal at $4 billion.
3G will begin its tender offer no later than 17 September and Burger King has the right to solicit higher offers until 12 October.
Burger King's stock price rose by $4.73, or 25 per cent, to close yesterday at $23.59 in New York Stock Exchange.
The $4-billion deal to buy Burger King topped the $3.5 billion acquisition of OSI Restaurant Partners, the parent of Outback Steakhouse in June 2007 by private equity firms Bain Capital Partners and Catterton Management Company.