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Proposed Burger King Sale Gone Sour

MIAMI-A buying group led by Texas Pacific Group backed out of plans to buy the locally-based fast-food chain from Diageo PLC of London for $2.2 million.

By Melissa Bogdany | Updated on November 19, 2002

MIAMI-A buying group led by Texas Pacific Group has told the current owner of the locally-based Burger King Corp., London’s Diageo PLC, that it will not be able to purchase the company under the previously agreed upon terms, which placed the sale price at $2.26 billion. However, Texas Pacific Group and its partners have expressed a desire to continue discussions on a transaction with different terms, according to a statement.

“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.

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