Burger King going public with new partner

MIAMI, FL—Burger King is to go public again under what has been announced as a “definitive business combination agreement” with U.K.-based Justice Holdings Ltd.

Publicly-traded Justice has agreed to buy a 29 per cent share of Burger King for $1.4 billion US in a deal expected to close in 60 to 90 days.

Justice and Burger King Holdings will be dissolved and the new combined company will be named Burger King Worldwide Holdings, trading on the New York Stock Exchange.

3G Capital, the company that bought Burger King for $4 billion and took it private in October 2010, will keep a 71 per cent share of the company.

Justice Holdings will stop trading on the London Stock Exchange.

The restaurant chain’s senior management team is to remain in place.

Justice chairman Lord Myners said in a release, “The Burger King transaction offers a number of the key features the board was looking for in a combination: strong cash flows, an experienced and successful management team, significant strategic growth opportunities and a company that would benefit from Justice’s public ownership."

Justice was created with an initial public offering in February last year by a group led by Nicolas Berggruen, a billionaire investor who has made his fortune buying and selling companies, Martin Franklin, executive chair of Jarden Corp., and William Ackman, founder and chief executive officer of the hedge fund Pershing Square Capital Management.

Justice was created to buy into a business partnership in a deal.

The agreement to buy into Burger King was announced last week shortly after the quick-service chain launched an extensive menu overhaul, adding coffee frappes, fruit smoothies, specialty salads and snack wraps.

Ackman promoted the purchase of Burger King shares with his partners in Justice after being impressed by 3G’s success with other companies it invested in, such as brewer Anheuser Busch. He also took note of Burger King’s earnings before interest, taxes, depreciation and amortization, which rose to $503 million last year, from $320 million in 2010.

Burger King’s has more than 12,500 restaurants around the world, 92 per cent of them franchised.