The Wall Street Journal, which reported the discussions, says BK has been in talks with PE firms for weeks and one interested firm was 3i Group. However, 3i is denying the discussions. “We are not in talks to buy Burger King,” a 3i spokeswoman wrote in an email Wednesday.
This isn’t the first time BK has sought out help from PE firms. In fact, buyout firms once owned Burger King. Diageo, in 2002, sold the home of the whopper to TPG, Bain Capital and Goldman Sachs for $1.5 billion. Burger King then went public in 2006 and the PE firms sold much of their holdings. TPG still owns a roughly 11% stake, Bain has 10% and Goldman Sachs also holds about 10% as of June 30, according to Yahoo Finance.
BK’s search for a PE investor comes after reporting dismal earnings last week. BK, which introduced the Whopper in 1957, said revenue dropped 1% to $623 million for its fourth quarter ended June 30. Net income was off 17% to $49 million.
Revenue for the 12 months ended June 30 was flat at $2.5 billion. But profit for the year slumped 7% to $186.8 million. Worldwide comparable sales were -2.3%, BK said.
(UPDATE: The New York Times is reporting that the PE firm interested in buy BK is 3G Capital, not 3i. A deal could be reached in coming days, the story said.)
Who is 3G? I don’t know and the NY Times doesn’t provide much information. The little known PE shop has apparently held a stake in Wendy’s. The NY Times report named Alexandre Behring as leading the deal for 3G. Behring is a Brazilian who before joining 3G spent 10 years at GP Investments, one of Latin America’s largest private-equity firms.
TPG declined comment. Officials for Burger King and Goldman couldn’t be reached for comment.