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- You have to decide if you want cash, new shares, or a mix of both, and you have to vote in favor of or against the proposed transaction.
- Unfortunately, any decision you make will trigger a capital gain on the disposition. This doesn't affect you if you hold your shares in an RRSP or TFSA.
- Upon completion of the transaction, former Tim Hortons shareholders will be minority shareholders, with approximately 22% of the common equity of the new Holding.
- For the merger to be approved, it needs an affirmative vote of at least 66.6% of the votes cast on the arrangement.
Burger King's Earning Preview: Entry Into Lucrative Markets And Tim Hortons Deal To Boost Top Line GrowthStock Gazer • Mon, Nov. 3
- On average, analysts’ are expecting Burger King Worldwide to post 3rd quarter revenues amounting to $282 million, earnings for the company are expected to be reported at $0.27 per share.
- The company has been able to drive earnings through rejuvenation of its own brand via franchising of its company-owned stores, store expansion and menu innovation.
- Burger King’s margins have performed better than the industry average and the company has been able to withstand cost inflation.
- Burger King has been intent on going through with the takeover deal as it aims to take advantage of Tim Hortons’ dominance over American companies in Canada.
- The takeover will enable Burger King to increase tax savings via inversion. The company will thus be able to take advantage of lower corporation taxes in Canada.
- BKW will see moderately positive numbers in Q3.
- EPS should see a statistically significant increase over last year quarter.
- Though the company has seen leaner revenues, the company continues to be a viable long term pick-up.
What Synergies Will Burger King's Merger With Tim Hortons Bring To The Table?Critical Timing • Wed, Sep. 24
- Burger King’s merger with Tim Hortons will benefit the U.S. company in several key ways such as incremental revenues, better menu resources and of course tax savings.
- The two companies entered an agreement to create the world’s third-largest quick service with combined system sales of $23 billion and 18,000 restaurants strewn in 100 countries around the world.
- Tax inversion will allow Burger King to enjoy lower corporate tax in Canada. Canada’s federal tax rate is 15%, while Ontario’s corporate tax rate is 11.5%.
- The merged company will therefore pay a combined tax rate of 26.5%.
Is Burger King Risking Top Line For A Better Bottom Line?
- New reports suggest that Burger King’s acquisition of Tim Hortons would likely lead to a change in base, as the company aims at relocating its headquarters north of the border.
- Over the last three years, Burger King’s revenue has declined year-over-year, while net income has been rising.
- Burger King's revenue fell to $502.1 million from $606 million during the past six months, while net income increased to $135.5 million from $98.7 million reported year-over-year.
Why McDonald's Shouldn't Worry About The Burger King/Tim Hortons Deal
- Burger King recently bought Tim Hortons in an $11.4 billion deal, marking the second time that Tim Hortons has been purchased.
- The biggest question for current and future shareholders is whether Tim Hortons and Burger King combined will make an impact to McDonald's breakfast market share long-term.
- McDonald's has plenty of experience with new entrants trying to take market share away from their breakfast segment and McDonald's continues to rule breakfast hours.
- It is unlikely that Burger King will implement Tim Hortons menu into theirs because recent success for Burger King has mainly been due to simplicity of a smaller menu.
Update: Another Reason To Like The Burger King Deal
- We've already gone on the record and stood behind the Burger King/Tim Hortons deal.
- Interesting new development pertaining to Mr. Buffett's preferred shares reiterates our stance.
- Mr. Buffett likely thinking with a long-term outlook about the new company.
- Burger King is half the size of Tim Hortons in revenues and earnings.
- But its market cap is bigger.
- BKW's pre-deal PE was 41, compared to 14 for Tim Hortons.
- That makes this a classic roll-up deal, not a tax inversion.
- The media has seized the tax inversion aspect of the transaction to the exclusion of all other reasons for the acquisition.
- Burger King will remain Burger King. Tim Hortons will remain Tim Hortons.
- When it comes down to coffee, burgers, and doughnuts, consumers can get really emotional.
- The focus of this article is to educate the reader and to make sense of the transaction.
Will Burger King's Acquisition Of Tim Hortons Come Back To Haunt It?
- The planned Burger King acquisition of Tim Hortons was celebrated on Wall Street.
- Back on Main Street, however, there are calls for a boycott due to the American brand moving its headquarters to Canada.
- With these companies now priced at a premium, should investors stick around to see how things play out?
- With financing from Warren Buffett, BKW announced a merger with Canadian doughnut-and-coffee chain Tim Hortons.
- The acquisition would be structured as a tax inversion and relocate BKW's headquarters to Canada, where it would benefit from lower corporate taxes.
- Investors have already responded with enthusiasm; BKW rose 20% to $32.40, while THI rose almost 19% to C$82.03.
- With several solid quarters of results already under its belt, BKW looks very appetizing in the second half of 2014.
- Burger King is slated to acquire Tim Hortons in a cash and stock deal come early 2015.
- The combined company would make Burger King the third largest fast food chain in the world.
- Tim Hortons shares currently are trading at a discount compared to the anticipated purchase price that Burger King has outlined.
Burger King Hit Record High Prices, Can You Stomach It?
- Burger King has bet hard on the franchise model.
- Franchise revenues made up over 90% of total revenues in the last quarter.
- The margins look great.
Who Wins If Burger King Acquires Tim Hortons? Everyone
- Burger King is set to purchase Tim Hortons in a deal worth over $11 billion. The deal will combine the two entities into the third largest quick service restaurant worldwide.
- Such a deal would allow Burger King to move its headquarters to Canada and enjoy tax savings, as well as free up shares and introduce synergetic savings.
- Shares in both Burger King and Tim Hortons swelled over 19% in trading the day news of the deal broke. Buy in once they contract for a long position.
- Burger King has made a move to acquire Tim Hortons bake shop.
- The M&A move would create fantastic synergies and help Tim Hortons grow through the U.S.
- Some tax rumours were slightly debunked this morning as a result of Warren Buffett's involvement in purchasing preferred shares from the deal.
Burger King's Purchase Of Tim Hortons Isn't As Great As It Sounds
- Shares of Tim Hortons soared on Aug. 26 after news broke that it would be acquired by Burger King at a value of $11.4 billion backed partially by Warren Buffett.
- While management at Burger King suggests that the business will be large, the fact of the matter is that investors won't get a business anywhere near the size purported.
- Perhaps most important is that the transaction will create a business that could be very much overleveraged and which could make value creation difficult to achieve.
Wed, Dec. 24, 9:57 AM
- The restaurant industry will run up against soft comps in January and February due to last year's winter storms which were much worse than normal.
- Restaurant same-store sales will rise just over 2% for the full year, according to an estimate from the co-founder of the NRN-MillerPulse tracking survey.
- Technomic sees a 3% growth in restaurant comps in 2015, while Fitch Ratings has an outlook for 2% to 3%.
- On the cost side, commodity prices for chicken, cheese, wheat, and pork are all expected to moderate. However, beef prices are seen increasing 4% to 8%.
- Minimum wage increases in many state kick in on January 1 which could impact the bottom line for many chains.
- Fresh IPOs, concept acquisitions, and leveraged buyouts care expected to be major themes in 2015, according to analysts.
- CEOs on the hot seat include Don Thompson at McDonald's (NYSE:MCD) and Nigel Travis at Dunkin' Brands (NASDAQ:DNKN).
- Restaurant stocks: CAKE, CBRL, CMG, DPZ, DRI, EAT, JACK, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN, HABT, NDLS, PLKI, LOCO, YUM, KKD, BOBE, TAST, GTIM, FRSH, COSI, FRS, PBPB, FRGI, QSR.
Mon, Dec. 15, 9:37 AM
- Burger King (NYSE:BKW) restaurants in Germany which were shut down amid a dispute with insolvent operator Yi-KO Holding will open back up this week.
- An insolvency administrator will operate the outlets.
- The company says the 89 locations affected will all be back open by Wednesday.
Fri, Dec. 12, 7:19 AM
- A bet on Burger King Worldwide (NYSE:BKW) is a bet on 3G, according to the analysts at RBC Capital Markets.
- In particular, the investment firm thinks 3G will squeeze significant margin gains out of the Tim Hortons warehouse business and create even more synergies through acquisitions in the fast-food space.
- Earlier this week, RBC mentioned Yum Brands as a potential target for 3G.
- BKW is rated at Outperform by RBC with a $38 price target.
Tue, Dec. 9, 12:43 PM| 1 Comment
Mon, Dec. 8, 7:11 AM
- Goldman Sachs resumes coverage on Burger King Wordwide (NYSE:BKW) with a Buy rating.
- The investment firm sets a $39 price target on shares.
- The positive take from GS on the restaurant chain is that store changes in the U.S. are resonating with customers and that there is considerable upside for the international business.
- What to watch: Later this week Burger is expected to issue an update on its merger with Tim Hortons. Visibility on the combined company's store count in North America should clear up.
Fri, Dec. 5, 7:49 AM
- Burger King Worldwide (NYSE:BKW) and Tim Hortons (NYSE:THI) provide an update on the upcoming merger between the fast-food restaurant chains.
- The companies say the transaction has cleared regulatory hurdles under the Hart-Scott-Rodino Act, the Competition Act in Canada, and the Canada Transportation Act.
- The deal is expected to be completed on December 12.
Thu, Dec. 4, 5:08 PM
- Burger King (NYSE:BKW) +3.7% AH after Canada's government approves its purchase of Tim Hortons.
- Among conditions BKW agreed to in exchange for approval: locating its corporate HQ in suburban Toronto, maintaining employment levels at Tim Hortons' Canadian outlets, and expanding the coffee chain's global presence at a "significantly greater" pace than previously envisaged.
- Government officials praise BKW's decision to set up headquarters in Canada as proof that its drive to lower corporate tax rates is attracting investment.
Wed, Dec. 3, 7:16 AM| Comment!
Tue, Dec. 2, 8:56 PM
- Though federal legislation on a minimum wage increase is stalled in Congress, there's still movement on the hourly payment front.
- Organized protests at Wal-Mart stores on Black Friday were more widespread than in recent years.
- The city council of Chicago approved a gradual increase of the minimum wage in the city to $13 per hour by 2019.
- The pay hike in the Windy City follows similar measures in Seattle, San Francisco, and Oakland.
- Earlier this week, a state senator is California introduced legislation to boost the minimum wage in the state to $13 per hour by 2017.
- Related stocks: MCD, WMT, BKW, WEN, YUM, TGT.
Mon, Dec. 1, 3:30 PM
- The National Restaurant Association's Restaurant Performance Index gained 1.8% M/M in October to 102.8.
- The poll of restaurant operators indicated 55% saw improved traffic trends in October.
- Once again, food commodity expenses and rising labor costs are viewed as potential drags.
- The positive read on the sector came before the November slide of gas prices which is viewed as a potential driver for restaurant traffic and spending.
- Restaurants stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN.
Sat, Nov. 29, 10:29 AM
- Analysts with Gasbuddy.com predict some gas stations in the U.S. will offer $2 per gallon gas by Christmas.
- The last time the average price of gas in the U.S. was below $2 was in March of 2009.
- Forecasts from economists vary widely on the overall gas benefit to consumers for Q4. The high end from the group is an outlook of $300 per household, while the low end is closer to $100.
- Most analysts see an immediate lift for retail chains with large distribution channels. Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Costco (NASDAQ:COST), Dollar General (NYSE:DG), Family Dollar (NYSE:FDO), Dollar Tree (NASDAQ:DLTR), Big Lots (NYSE:BIG), and Five Below (NASDAQ:FIVE) come to mind.
- Airline stocks (JBLU, DAL, UAL, LUV, AAL, RJET, ALK, HA, ALGT, VA) have already ripped strong gains off the OPEC news, although some see even more long-term upside as forward fuel hedges get reworked.
- A sustained period of low gas prices should lift restaurant stocks (CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN) say some analysts.
- The gaming sector is (CZR, PNK, BYD, ISLE, CNTY, MCRI, MGM, NYNY) also an off-the-radar pick to bounce.
Tue, Nov. 25, 2:10 AM
- The FDA will publish sweeping new rules today requiring chain restaurants, movie theaters and large vending machine operators across the country to post calorie counts on their menus and menu boards.
- "Obesity is a national epidemic that affects millions of Americans," says FDA Commissioner Margaret Hamburg.
- The new rules also require other nutritional information - including calories from fat, cholesterol, sugars and protein - to be made available in writing upon request.
- Related tickers: BJRI,BWLD,BKW,CMG,DENN,DPZ,KKD,MCD,PFCB,PZZA,CAKE,WEN,PNRA
Tue, Nov. 18, 3:24 PM
- The NPD Group reports restaurant traffic was flat in Q3.
- Spending was up 3% during the quarter as average tickets were up across segments.
- Traffic growth by category: Fast-casual +8%, Coffee/donut/bagel +5%, Mexican quick service +5%, hamburger quick service -3%, sandwich concepts -1%, Asian quick service -1%.
- Restaurant stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN.
Sun, Nov. 9, 9:14 AM
- Burger King Worldwide (NYSE:BKW) has announced that it will open about 12 outlets in India over the next 60-90 days, changing its menu to sell mutton, chicken and veggie sandwiches.
- "In the long run, India is going to be one of the largest markets globally. Burger King most certainly sees India as one of the biggest opportunities in the future," says Rajeev Varman, chief executive of the hamburger chain's India unit.
- Burger King is coming into the country late in the game. Rival McDonald's has been in India for close to two decades and has already grown its network in tier two and three cities.
Tue, Nov. 4, 11:43 AM
Tue, Nov. 4, 8:18 AM| Comment!
Burger King Worldwide Inc through its subsidiaries, operates fast food restaurants. The Company's restaurants feature flame-grilled hamburgers, chicken and other specialty sandwiches, french fries, soft drinks and other food items.
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