Burger King is, of course, one of the best known names in the
mall or shopping zone. The signs (as well as the Whopper itself) are
recognized universally and usually with positive reactions. Burger King
was founded in Miami in 1954 by James McLamore and David Edgerton, the
Whopper, an immediate success, launching in 1957. Today the group
operates over eleven thousand restaurants in sixty countries providing
employment for over three hundred thousand people. Some ninety percent
of the outlets are franchises, operated by individuals or independent
family businesses that have been with the company for many years,
through its peaks and troughs.
The brand has been through many hands over the years through
connections with Pillsbury and, in fact, included a period of British
ownership when the Grand Metropolitan Hotels conglomerate held
Pillsbury. Burger King Holdings Inc., the parent company, is today,
private and independently owned by an equity sponsor group comprised of
Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners.
Any investor then who wants to have an interest in Burger King has to
do so by holding stock in one of the equity partners in Burger King
Holdings Inc. Bain Capital is not listed on the New York Stock Exchange
which limits the choice to the two others, both of which are major
financial institutions.
The most obvious choice would be Texas Pacific Group although it
wouldn’t be entirely true to say that this investment house’s record
was one of predictability. This may be due to it’s policy of taking on
apparently hopeless causes over the years - often when it’s done that,
investors have deserted it only to regret that decision when the
business has been turned around. Texas Pacific tends to take an active
interest in its acquisitions - it’s most high profile take-over
probably being Continental Airlines with the subsequent merger into
that of Southwest Airlines and People Express. It was, of course, a
similar circumstance when they bought the largest tranche of Pillsbury
from Grand Met before demerging Burger King from that. However, since
the second quarter of 2002, the stock has generally been in growth and
the current price is slightly under $180.
Goldman Sachs is one of the best known and respected finance houses
around the financial world not only on Wall Street. Its portfolio
contains stock in some of the soundest and most profitable enterprises
on the planet. This house can claim more or less continuous growth and
stability for its stock. The price range over the year has been between
just over $83 and $114. On that basis, the current price of around $109
looks good value.
These two equity houses have different approaches to their holdings -
Texas Pacific getting heavily involved, Goldman Sachs standing at arm
length. Either are likely to prove sound long term investments offering
good prospects for growth with reliable dividend income - however,
don’t expect either to send out free whopper vouchers with the share
certificates.
Proven Investment Advice
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