MARKET REPORT: Diageo Disposal of Burger King Helps It Escape a Grilling
Jivkov, Michael, The Independent (London, England)
WORD HAS it the long-awaited disposal by Diageo of its fast-food chain Burger King is virtually complete and could be announced as soon as today. A consortium of American private-equity firms led by Texas Pacific Group is expected to seal the pounds 1.4bn acquisition, which will most likely be financed as a leverage buyout.
There were some suggestions that there is an outside chance of the deal falling through at the last minute. This would be a great blow to the financial buyers, especially Texas Pacific, which has been working to secure control of Burger King for more than six months. However the general consensus in the City was that the deal was done and dusted. That was also the steer from a source close to the company who confirmed the disposal process is almost at its end. He would not be drawn on the timing.
Diageo is said to be keen on keeping the current management team intact at the fast-food chain in order to secure a smooth transition. Although there was talk early in the negotiating process of major changes it is believed that the existing team, led by the chairman, John Dasburg, will remain at the helm. Yesterday Diageo shares largely avoided the stock market carnage, falling just 12p to 681p.
Elsewhere ICI dropped 9p to 281p after a profit warning from rival DuPont. The US chemicals giant posted some pretty solid second- quarter figures but cautioned investors to expect third-quarter earnings per share of 24 cents. Analysts had hoped for 34 cents. Smaller UK rival Croda International was also unsettled, falling 4.5p to 246p. JP Morgan upgraded industrial gases group BOC, off 13p at 836p, to "buy" from "market perform", with a 1,083p target price. The broker reckons BOC can ride out the current economic malaise and actually believes industry fundamentals are improving.
The FTSE 100 dropped 80.9 points to 3,777.1 in yet another volatile session. At one point blue chips were down 232 points, at 3,625.9, but rallied after early gains on Wall Street. The worst blue-chip …
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Publication information: Article title: MARKET REPORT: Diageo Disposal of Burger King Helps It Escape a Grilling. Contributors: Jivkov, Michael - Author. Newspaper title: The Independent (London, England). Publication date: July 25, 2002. Page number: 22. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.
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