Burger King Is Planning IPO

Burger King Corp., the second-largest hamburger chain, said Wednesday that it would go public, allowing its private equity owners to cash out three years after buying the firm for $1.5 billion.

Plans for an initial public stock offering will be filed this month or next month, Miami-based Burger King said.

Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners bought Burger King from Diageo in 2002. The company has 11,000 restaurants.

Burger King has lost market share to McDonald’s Corp. and Wendy’s International Inc. as new menu items and ads have failed to lure customers. Burger King’s market share declined from 1999 to 2004, according to data compiled by restaurant consultant Wally Butkus.

Still, he said, “Burger King has worked harder to improve operations. They are in a much better position than they have been in some time.”

The firm’s sales have risen for seven consecutive quarters under Chief Executive Greg Brenneman, a turnaround specialist who took over the company in August 2004 and became its 10th leader in 15 years.

Other analysts were wary of the stock. “Burger King is a flawed piece of work,” said Malcolm Knapp, a principal in his own New York-based restaurant consulting firm. “They have large franchisees that aren’t very strong. I think it’s pretty premature for an IPO.”

Burger King didn’t say how many shares or what percentage of the company would be offered.

A Burger King sale would follow an IPO last week by fast-growing Chipotle Mexican Grill Inc., a spinoff of McDonald’s. Chipotle’s shares rocketed from an IPO price of $22 a share to $44 on their first trading day. They closed at $46.56 on Wednesday.

Also, Wendy’s plans to sell shares in its Tim Hortons Canadian doughnut and coffee chain.