Bill Ackman gets super sized payout from Burger King deal

Ackman's stake in Burger King valued at $1.24 billion on Tim Hortons merger

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The Independent Online

Bill Ackman is having a whopper of a week with shares of Burger King jumping after the fast food chain announced plans to merge with Canadian doughnut and coffee chain Tim Hortons.

The stock jumped more than 20 per cent after news of the proposed merger broke on Sunday night, with his 10.9 per cent stake in Burger King now valued $1.24 billion, according to data compiled by Bloomberg.

The founder of Pershing Square Capital Management helped the fast food chain go public in 2012 after it merged with Justice Holdings, a London-based investment vehicle co-owned by Ackman, and began trading on the New York Stock Exchange.

Earlier today, Burger King confirmed it plans to buy Tim Hortons for about $11 billion and relocate the headquarters of the new company to Canada, where it will benefit from lower corporate taxes. Burger King is currently headquartered in Miami, Florida.

Burger King and Tim Hortons are set to become the world's third biggest fast food chain with a combined market value of $20 billion operating 18,000 restaurants in over 100 countries.

The deal, approved unanimously by the two board of directors, will see Tim Hortons shareholders receiving 65.50 Canadian dollars in cash and 0.8025 shares of the new company for every Tim Hortons share they already own. Burger King's majority shareholder, 3G Capital, will convert its 70 per cent stake and retain control of 51 per cent of the new company.

Meanwhile, Warren Buffett, the billionaire chairman of Berkshire Hathaway, will  provide $3 billion in preferred equity financing, the companies said in a joint statement, adding that it "will not have any participation in the management and operation of the business".