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Burger King UK could be heading to the London stock market
Burger King’s UK operation is set to join the London stock market, according to reports. Private equity firm Bridgepoint (BPT) has been the master franchisee for Burger King UK since 2018 but is now believed to have appointed advisers with a view to floating the business on the London Stock Exchange with a £600 million valuation during the first half of 2022.
The master franchise for Burger King is owned by US-listed Restaurant Brands. As of the start of last year, it owned or franchised 18,625 Burger King restaurants in more than 100 countries. In 2021, Burger King system sales grew by 15.9% to $23.45 billion.
The exact timing and scale of the UK division stock market listing are still to be settled but a recent report by Sky News claimed that a flotation was now ‘a likelier outcome’ than a sale to another private equity buyer, citing sources close to the deal.
Burger King UK is believed to have hired Peel Hunt alongside Bank of America and Investec to advise on float, said a separate report in The Times.
Bridgepoint, which itself floated in London in the summer of 2021 and is now a FTSE 250 constituent, acquired Burger King UK alongside Caspian UK Group, one of Britain’s largest franchisees with 74 Burger King sites.
The Caspian acquisition was believed to be worth more than £50 million although details were kept under wraps.
Four years ago, Bridgepoint entered into a 20-year master franchise agreement giving it the right to be the custodian of the Burger King name and control over the brand’s proposition in the UK, and the right to rollout new stores across the country.
It now oversees 530 Burger King restaurants, 400 of which are owned by franchisees, although that is dwarfed by US giant McDonald’s 1,300-odd outlets in the UK, 1,100 of which are run by franchisees.
Bridgepoint also has a minority stake in the holding company of the French master franchise for Burger King.
A Burger King UK stock market listing would follow the October 2021 London debut of fast food group Tortilla Mexican Grill (MEX:AIM) and comes during a period of aggressive expansion in the restaurants industry as the UK reopened following months of stop-start closures because of Covid-19.
For example, Greggs (GRG), Wagamama-owner Restaurant Group (RTN), Pizza Express and Franco Manca and The Real Greek-owner Fulham Shore (FUL:AIM) are all planning to expand their estates by exploiting the absence of restaurant chains that failed to survive the pandemic.