Burger King, the No. 2 US fast-food chain, agreed to sell itself to investment firm 3G Capital for about $3.26bn in a deal analysts said would give the restaurant breathing room to fix its business.
At $24 per share, the deal represents a 46 per cent premium to Burger King's price before news of the deal talks emerged on Wednesday.
Including the debt that New-York based 3G will assume, the deal is worth about $4bn, the company said today. The transaction is expected to close in the last three months of 2010.
"It looks like a good price for Burger King shareholders. I don't anticipate that someone is going to come in higher," said Telsey Advisory Group analyst Tom Forte.
Analysts said the deal's valuation - at almost nine times its cash flow over the last year - is a bit higher than previous restaurant deals and could pave the way for more acquisitions.
"The valuation is based on good fundamentals which Burger King doesn't have and probably won't have for another year," said Stifel Nicolaus restaurant analyst Steve West. On Wednesday, he issued a research note saying that a $23-per-share price would satisfy shareholders.
TPG Capital LP, Goldman Sachs Capital Partners and Bain Capital Investors collectively own about 31 percent of Burger King and will tender their shares into the offer, which is due to begin by 17 September
Under terms of the deal, Burger King can solicit higher bids from other third parties until 12 October.Reuse content