• by Karlene Lukovitz  @KLmarketdaily, September 3, 2010

Burger King Holdings Inc. announced that it has agreed to sell to private equity firm 3G Capital in a deal worth about $4 billion, including debt.

The deal values the company at $3.26 billion, or $24 per share – about $1 more per share than analysts expected, and a 46% premium on BK's stock price as of closing on Aug. 31, before news of the deal negotiations leaked.

Burger King has until Oct. 12 to solicit higher offers from other interested buyers.  However, some analysts have noted that the 3G price is a good one for shareholders that is unlikely to be trumped by other bidders.

3G, headquartered in New York and run by managing partner Alexandre Behring, was founded and continues to be backed by banking and retail investment billionaire Jorge Paulo Lemann and two of Lemann's business partners, reported Reuters.  3G's common stock investments include U.S. railroad CSX Corp. (3G and The Children's Investment Fund led a proxy battle against CSX in 2008), Coca-Cola Enterprises Inc. and Norfolk Southern Corp.  Lemann merged Brazil's largest breweries in the late 1990's and sold them to Belgium's Interbrew in 2004, forming the basis for what later became InBev.

John Chidsey will continue as Burger King's CEO during a transition period, then become co-chairman of the board with Behring.

Analysts and restaurant industry observers have noted that private ownership should present opportunities to revitalize BK, which has suffered as its core customer base of young males have been disproportionately affected by recession-driven unemployment.  BK has continued to stress value-priced menu items, while in recent times also introducing premium offerings such as $4 Steakhouse XT burgers.

Burger King has been losing share to McDonald's, which has continued to upgrade its restaurant facilities and broaden its menu to include healthier items such as salads, as well as McCafe and smoothie beverages.

If finalized, the deal is expected to add more momentum to the recent trend of restaurant chains selling to private investors.  In recent months, private equity firms have acquired Hardee's/Carl's Jr. parent CKE Restaurants and Brinker International's On the Border Mexican Grill & Cantina, and California Pizza Kitchen and Benihana Inc. are currently seeking buyers.