3i denies it has an appetite for burgers

Published on Tuesday 31 August 2010 22:42

SHARES in fast food giant Burger King soared after rumours that a private equity company was in talks to buy the holding company.

Both The New York Times and The Wall Street Journal reported that 3G Capital was among parties interested in pursuing a deal with Burger King. Neither publication named its sources.

Earlier in the day, The Wall Street Journal reported that the interested party was 3i Group.

When 3i denied its involvement, Burger King momentarily lost much of its hefty stock gains it made during the morning.

But by midday, the company's shares were on the climb again, gaining $2.48, or 15.1 percent, to $18.93 in trading.

The Wall Street Journal reported that talks regarding a possible sale have taken place over the past few weeks.

But a 3i spokeswoman said: "I am happy to confirm that we are not in discussions with Burger King." She said Burger King's size falls outside the firm's interests.

A spokesman from Burger King declined to comment. RW Baird analyst David Tarantino upgraded his forecast for the stock - saying he was expecting it to climb 15.5 per cent in the next year.

"Media reports seem plausible, but such a transaction remains highly uncertain," he told investors. - but he said the company had healthy cash flows and plenty of opportunity to increase productivity and expand overseas. Burger King is the second largest hamburger chain after McDonald's.