Burger king down
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Posted on Thu, Oct. 31, 2002
Poor sales may hurt Burger King buyout
BY ELAINE WALKER
Burger King's sales have deteriorated over the past three months, raising continued questions about the fast-food chain's sale to a buyout team led by Texas Pacific Group.
The news of Burger King's recent performance came in a trading statement released Monday by parent company Diageo Plc.
The British company says it is continuing to work with the buying group to conclude the sale.
The consortium of private investment firms, which also includes Bain Capital and Goldman Sachs Capital Partners, had agreed in July to pay $2.26 billion for Burger King.
The deal, which was supposed to close by the end of the year, included requirements that the fast-food chain, which is based in Miami-Dade County, meet certain performance targets.
While those targets have never been publicly released, the trading statement released by Diageo indicated that aggressive price discounting in the fast-food arena has kept Burger King from living up to performance expectations.
Analysts say Diageo may have to renegotiate the deal and lower the price to complete the sale.
Diageo spokeswoman Jennifer Crowl said the deal is on track to close this year and had no comment on the possibility that the price may change.