Burger King in Buyout Talks, but Not With 3i

Burger King is in advanced talks to sell itself to a little known private investment firm called 3G Capital, people involved in the negotiations told DealBook.

Burger King
Burger King

A deal could be reached as soon the coming days, these people said, though they cautioned it was possible that the talks could still collapse.

Leading the deal for 3G is Alexandre Behring, a Brazilian who before joining 3G spent 10 years at GP Investments, one of Latin America’s largest private-equity firms.

He sits on the board of CSX since 2008 after 3G began a proxy fight against the railroad. Mr. Behring is a former railroad executive, serving as the chief executive of America Latina Logistica, Latin America’s largest independent railroad and logistics company, which operates more than 13,000 miles of track in Brazil and Argentina.

3G has taken an interest in fast food chains before: It held a 6.7 stake in Wendy’s in 2008. It could not be determined what price is being discussed.

Burger King currently has a market value of $2.4 billion

A deal for Burger King would mark the second time the company was taken private in the past decade. A consortium of firms — TPG, Bain Capital and Goldman Sachs — took the company private in 2002. Burger King was taken public in 2006, though the consortium still owns about a third of the company.

Shares of Burger King rose 15 percent on Monday after a report in The Wall Street Journal that London-based 3i Group was preparing to buy Burger King. However, 3i Group is not in talks with Burger King and has no interest in the fast-food chain, Katherine van der Kroft, a spokeswoman for 3i based in London, told DealBook.

“The firm is not in discussions with Burger King has no interest in the company,” she said. “We’re not talking to Burger King and we’re not sure where this has come from.”

3i is a mid-market private equity firm, meaning the deals it does are much smaller than the $2 billion or $3 billion required to buy Burger King.

“This would be a much larger deal than something we’d typically do,” Ms. van der Kroft said. She also added that 3i focuses on buying minority stakes in our United States business, so it wouldn’t be doing a leveraged buyout there.