Burger King Worldwide Holdings Inc said it would go public through an agreement with London-listed investment firm Justice Holdings Ltd (JUSH.L), less than two years after it agreed to be taken private by private equity group 3G Capital Management LLC.
While 3G Capital will retain a 71 percent stake in the company, the quick sale highlights the jump in Burger King's profits. Justice Holdings expects the fast food chain's core profits in 2012 to be almost double those in 2010.
Justice Holdings, a shell company that went public in February 2011 with the explicit aim of clinching an M&A deal, will pay about $1.4 billion in cash for a 29 percent stake in the company created through its merger with Burger King.
"When I learned that Burger King was interested in a possible transaction with Justice, I brought the opportunity to my Justice founding partners to consider," William Ackman, a hedge fund veteran who is a co-founder of Justice Holdings, said in a statement.
"They liked what I saw, a 58-year-old global brand, and a simple, predictable, free cash flow growth franchise in the process of transformation into a pure brand royalty business. The results to date have been remarkable."
3G Capital purchased Burger King in September 2010 in a $3.26 billion deal. The company, known for its Whopper hamburgers, has revamped its menu with items like salads and smoothies as it fights to win over diners and compete with McDonald's Corp.
The newly formed combined company is expected to list on the New York stock exchange and Justice Holdings will stop trading in London.
(Reporting by Greg Roumeliotis in New York; Additional reporting by Lisa Baertlein in Los Angeles and Chris Jonathan Peters in Bangalore; Editing by Richard Pullin)
Reuters
