Burger King Holdings Inc. (NYSE: BKC) raised $425 million in an IPO yesterday, pricing at $17 a share. It begins trading publicly today. Offering highlights:
Number of shares sold: 25 million. High end of range: BKC priced at $17, the high end of its expected $15-17 range. Market Cap: Initial market cap is $2.3 billion or $3.5 billion if net debt is included. Main Underwriters: JPMorgan, Citigroup, Goldman Sachs and Morgan Stanley. Proceeds: BKC expects to see $393 million of which $350 million is earmarked to repay debt to existing shareholders. Selling shareholders: Texas Pacific Group, Bain Capital LLC and Goldman Sachs Capital Partners paid $1.5 billion for BKC four years ago, and received a dividend payout of $367 million in February. Their stake (77%; 74.3% if the underwriters' option is fully exercised) is currently valued at $1.74 billion.
Sam Snyder, Renaissance Capital Research (From MSN Money): "I would be surprised if Burger King had anything but kind of a modest debut...You're not going to see the first day juice of some other ones" such as Chipotle Mexican Grill (CMG) whose share price doubled in its first day of trading.
Francis Gaskins, IPO Desktop (From Reuters): "It sounds good that the proceeds are going to pay debt, however that debt was incurred in February to pay the equity sponsors...With the interest rates growing, the leverage could hurt them."
Rick Aristotle Munarriz, Motley Fool: "Even after the IPO, the company will have a negative book value, and that, too, is about as tasty as a meatless Whopper. With ants...There is a lot of potential here, but quite frankly, you'd be better off sticking to some [other] turnaround plays...Less fat. Less bitter aftertaste of raiding the till before going public. More flavor."