Bloomberg News

Burger King Rises on First Day of Return to NYSE

June 20, 2012

Burger King Starts Trading on NYSE Again Today After Ackman Deal

3G paid $3.3 billion for Burger King less than two years ago. Photographer: Jock Fistick/Bloomberg

Burger King Worldwide Inc. advanced in the fast-food chain’s return to the New York Stock Exchange today after completing a merger with a company co-founded by William Ackman.

Burger King, based in Miami, rose (BKW:US) 3.5 percent to $15.01 at the close in New York from the opening price of $14.50.

The chain, which was taken private in 2010 by New York investment firm 3G Capital Inc., is trading under the ticker symbol BKW. 3G got $1.4 billion in cash and remains the majority shareholder with a 71 percent stake. Pershing Square Capital Management LP, the $10.5 billion hedge fund founded by Ackman, holds 11 percent of Burger King.

3G, backed by Brazilian billionaire Jorge Paulo Lemann, paid $3.3 billion for Burger King less than two years ago. Since the takeover, which was the biggest restaurant deal in at least a decade, Burger King sales have stagnated, prompting the company to experiment with new items and delivery service. Ackman has said the chain plans to add stores internationally and franchise more sites to bolster earnings.

“We have a tremendous opportunity to capitalize on the growth and the recognition of our global iconic brand,” Burger King Chief Financial Officer Daniel Schwartz said in a telephone interview. While the chain is focused on expansion in Brazil, Russia and China, it may also look to open its doors in India, he said.

Eye on India

“India is definitely going to be a priority for us at some point,” Schwartz said. Burger King, which has stores in more than 80 countries, may also seek to expand in South Africa and Indonesia, he said.

The Whopper seller, which announced a new menu on April 2, has struggled to keep pace with McDonald’s Corp. (MCD:US) and tried to remodel stores to a so-called 20/20 prototype, which includes corrugated metal, brick, wood and concrete.

Last week, Burger King formed a joint venture to open 1,000 stores in China. The agreement with the Kurdoglu family and private-equity firm Cartesian Capital Group LLC to open the restaurants in the next five to seven years is the company’s largest development deal.

Burger King has more than 12,500 restaurants worldwide, of which about 90 percent are franchised. The chain went public again following a transaction, announced in April, in which Burger King was transferred to Justice Holdings Ltd. (JUSH), a special- purpose acquisition company.

Justice Holdings, started by Nicolas Berggruen, Martin Franklin and Ackman, raised 900 million pounds ($1.4 billion) in a February 2011 initial public offering in London. Berggruen is the owner of Karstadt, Germany’s biggest department-store chain, and also co-leads the New York-based Liberty Acquisition Holdings Corp. with Franklin.

Berggruen and Franklin each own about 1 percent of Burger King.

Before going private, the fast-food chain was listed on the NYSE, beginning in 2006, as Burger King Holdings Inc., with the symbol BKC. That stock was delisted in October 2010.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Robin Ajello at rajello@bloomberg.net;


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Companies Mentioned

  • BKW
    (Burger King Worldwide Inc)
    • $30.98 USD
    • 0.31
    • 1.0%
  • MCD
    (McDonald's Corp)
    • $93.47 USD
    • 0.13
    • 0.14%
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