"Diageo is continuing its discussions with TPG, while considering the other options available to it," says the release. Published reports say the fast food chain's market value has deteriorated and Diageo was asked to drop its price tag by perhaps hundreds of millions of dollars.
On July 25, Diageo announced the proposed sale of Burger King Corp. to a buying group consisting of Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners. The completion of the sale had conditions that included Burger King satisfying performance targets in the period up to closing and the buyer's financing.
Under that agreement, Diageo would have received $2.26 billion in cash for Burger King Corp. on a debt-free basis. Burger King would have retained a minimum level of working capital, including $15 million in cash.
Furthermore, the conditions of the deal included "no material breach at closing of contractual representations given by Diageo, and required regulatory approval," states the release. The deal was set to close this quarter.
Burger King was founded in Miami in 1954. Burger King has 11,450 restaurants in all 50 states and 58 countries and territories. Of those restaurants, 91%, or approximately 10,420 are owned and operated by franchisees. That leaves 1,030 that are corporately owned and operated.
Diageo plans to shed its food business and focus on its global spirits, wine and beer businesses.
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