Burger King To Go Public

Fast Food Chain Plans To Sell Shares For First Time In 52 Years

(AP)  Burger King Corp.'s parent company said Wednesday it plans to sell shares to the public for the first time in the fast-food chain's 52-year history, part of its attempt to recoup ground lost in fierce competition with rivals McDonald's Corp. and Wendy's International Inc.

Burger King Holdings Inc. plans to file with the Securities and Exchange Commission for an initial public offering in late February or early March, Chairman and CEO Greg Brenneman said in a long anticipated announcement. Standard & Poor's estimated the IPO would be for at least $600 million.

"Our goal has always been to take Burger King public," Brenneman said in a statement. "We believe the transparency and stability in ownership offered by being a public company will benefit our employees and franchisees for years to come."

The Miami-based company declined further comment citing U.S. securities law. Owen Blicksilver, a spokesman for the three private equity firms that own the chain, also declined comment.

Standard & Poor's said it placed Burger King's B+ rating for on CreditWatch for possible upgrade after the announcement.

The "company has the opportunity to further improve operating performance over the next few years through menu changes, further strengthening of store execution and advertising, and expanding store hours," credit analyst Diane Shand said.

But she added that progress could be "slow and uneven" because of intense competition in the industry.

Restaurant industry consultant Allan Hickok said Burger King's timing was right, considering the success last week of McDonald's spin-off of Chipotle Mexican Grill Inc. Its shares doubled on their first day of trading.

"You have to hit the public markets when they're receptive. Right now, I think you have a very favorable market environment. Several successful IPOs. Most recently you had Chipotle, which went ballistic," he said.

But Burger King's troubles probably mean that it won't command that high of a price for its IPO, said Janna Sampson, director of portfolio management at OakBrook Investments in Lisle, which owns $31.6 million of McDonald's stock.

Of the top three burger chains, only Burger King has never reaped the benefits of being a publicly traded company. Burger King was long the second-largest hamburger chain behind No. 1 McDonald's, but it fell into a tie for No. 2 with Wendy's in 2004, according to research firm Technomic Inc.

Officials at McDonald's and Wendy's didn't return messages seeking comment.

The equity firms, Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners, bought Burger King in 2002 for $1.5 billion with hopes of ending a period of slumping sales. The price was reduced from the initially agreed $2.26 billion because of Burger King's troubles.