Under the terms of the agreement, which has been unanimously approved by the company's board, stockholders will receive $24 in cash per share for all outstanding shares of the company's common stock, representing a 46% premium to the company's unaffected share price before recent market rumors. 3G Capital [image-nocss] has obtained committed financing to purchase all outstanding shares and refinance existing indebtedness.
The transaction is expected to close in the fourth quarter of this calendar year.
"The Burger King brand is one of the most recognizable and respected brand names in the world, and we are pleased that 3G Capital recognizes the value we have created in revitalizing the brand and enhancing operations over the past seven years," said John W. Chidsey, chairman and CEO of Miami-based Burger King. "We look forward to partnering with 3G Capital, whose proven track record as an investor, together with its financial and consumer brands experience, will serve to further strengthen the company, our restaurants and franchisees worldwide. We are committed to maintaining the superior guest experience the Burger King system is known for around the world as we transition ownership."
Alex Behring, managing partner of 3G Capital, said, "We have great respect for the Burger King brand and the strong business that management, the employees and the franchisees have built. The iconic Burger King brand, its solid franchisee network and great product offerings make this a perfect fit for 3G Capital, which has a strong track record of long-term investments in global consumer brands and retail companies. We are excited to work together with the company's employees and franchisees to continue to invest in the brand for the benefit of all its guests, employees and franchisees."
In conjunction with the transaction, Chidsey will remain chairman and CEO through the transition and subsequently assume a newly created position of co-chairman of the board. Upon closing of the transaction, Behring will be appointed co-chairman of the board of the company, alongside Chidsey.
It is anticipated that 3G Capital will commence a tender offer for all of the outstanding shares of the company no later than September 17, 2010.
Affiliates of TPG Capital LP, Goldman Sachs Capital Partners and Bain Capital Investors, which own approximately 31% of the company's outstanding shares in the aggregate, have entered into agreements pursuant to which they will tender their shares into the offer.
3G Capital has received debt commitment letters from JPMorgan Chase Bank, N.A. and Barclays Capital to provide the debt financing necessary to close the transaction. Under the terms of the deal, the transaction is conditioned upon, among other things, satisfaction of the minimum tender condition of approximately 79.1% of the company's common shares, the receipt of the Federal Trade Commission's approval under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, the receipt of funding under the financing agreements and other customary closing conditions. In the event that the minimum tender condition is not met, and in certain other circumstances, the parties have agreed to complete the transaction through a one-step merger after receipt of shareholder approval.
The company may solicit superior proposals from third parties for a period of 40 calendar days continuing through October 12, 2010. It is not anticipated that any developments will be disclosed with regard to this process unless the company's board makes a decision with respect to a potential superior proposal. There are no guarantees that this process will result in a superior proposal.
3G Capital is a multi-billion dollar, global investment firm focused on long-term value creation, with a particular emphasis on maximizing the potential of brands and businesses. The firm and its partners have a strong history of generating value through operational excellence, board involvement, deep sector expertise and an extensive global network. 3G Capital works in close partnership with management teams at its portfolio companies and places a strong emphasis on recruiting, developing and retaining top-tier talent. Affiliates of the firm and its partners have controlling or partial ownership stakes in global companies such as Anheuser-Busch InBev, Lojas Americanas, the largest non-food and online retailer in Latin America, and America Latina Logistica (ALL), the largest railroad and logistics company in Latin America. 3G Capital's main office is in New York City.
The Burger King system operates more than 12,150 restaurants in all 50 states and in 76 countries and U.S. territories worldwide. Approximately 90% of Burger King restaurants are owned and operated by independent franchisees, many of them family-owned operations that have been in business for decades.Click herefor recent details on Burger King's menu strategy from Fare magazine.
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