Ackman and Others Work to Take Burger King Public Again

“Just 18 months after being taken private in a leveraged buyout, Burger King Worldwide Holdings, one of the world’s largest fast-food chains, plans to list its shares on the New York Stock Exchange through a merger with Justice Holdings, an investment company based in London,” reports the New York Times.

“Under the terms of the deal, 3G Capital, the little-known buyout shop that bought Burger King in 2010, will receive about $1.4 billion in cash and continue to own about 71 percent of the company. Justice Holdings will own the rest.” Bill Ackman’s Pershing Square is expected to own roughly 10% of the newly public Burger King.

is a co-founder of Justice Holdings. In the press release announcing that Burger King would be going public, Ackman had this to say: “I have long admired 3G’s track record as best-in-class operators in the beverage (Anheuser Busch), retail (Lojas Americanas), logistics, and rail road industries, and I have personally invested in 3G Capital’s private equity funds.” “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.  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.”

“Since 3G’s acquisition of Burger King in October 2010, EBITDA minus CapEx has increased from $320 million in 2010, to $503 million in 2011, with 2012 EBITDA minus CapEx expected to be nearly double that of 2010’s results.  As importantly, Burger King’s management has made substantial progress in accelerating international growth through the formation of joint ventures with third-party capital sources and local operators.  As a result of management’s initiatives and the power of this global brand, I am confident this will be an excellent investment for Justice shareholders.”

“In order to avoid the potential for any actual or perceived conflict of interest, 3G will make an in-kind distribution to me of shares in Burger King reflecting my proportionate interest in the 3G private equity fund.  As a result, I will receive stock and no cash from this transaction.  At the closing of the deal, through the additional indirect economic interests I will own through the Pershing Square funds, I will be substantially increasing my personal stake in the company.   I have committed to retain my personal stake until after Pershing Square is no longer a shareholder.”