September 1, 2010 | In: Services

Burger King Buyout No Longer A Rumor

After reporting on the Burger King takeover rumor, I can confirm right now that it’s no longer a rumor. Apparently 3G Capital, an investment firm, is currently in talks with BK to buy the famous (and worldwide) food chain. It’s not known yet how much 3G Capital is willing to pay for the sale, but BK market capitalization is currently $2.56 billion. My opinion (again) is that 20 times EPS is a fair price for the food chain, which makes the total amount to be paid to buy BK is: $1.36 x 20 x 135.88 million shares = $3.7 billion. Anything above $3.5 billion is actually good.

The lowest ball offer is probably 17 times EPS (which is McDonald’s P/E), which is about $3.14 billion (or $23/share).

BKC is currently trading at $18.88, down from $19 an hour ago, even after the rumor has been confirmed.

1 Response to Burger King Buyout No Longer A Rumor


Burker King Is Sold for $3.3 Billion « Fadi El-Eter

September 2nd, 2010 at 11:37 pm

[…] to 3G Capital, or $24/share, which is very close to the $23/share lowball offer possibility that I discussed yesterday, when I assumed that the company will be valued at 17 times EPS (so the offer was really valuing […]

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