Industry News | April 22, 2002

Burger King Franchisees Work With Texas Pacific On Bid

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DES MOINES , Iowa -(Dow Jones)- As reported by Richard Gibson, of DOW JONES NEWSWIRES: On Friday, Burger King's U.S. franchisee association, which operates most of the chain's restaurants, announced that it is working to support Texas Pacific Group's bid for the now up-for-grabs brand.

"We think they would be the best owners," National Franchisee Association President Julian Josephson told Dow Jones Newswires as word spread that Burger King owner Diageo (NYSE: DEO) PLC (DEO) is soliciting offers for the world's second-largest hamburger chain.

Josephson stressed to Dow Jones that the association has "absolutely" no intention of being part of any bidding group. At the same time, he indicated that the franchisees believe they are crucial to the buyout process.

"It would be very difficult to acquire this brand if you did not seek and get support from the NFA for your bid," Josephson, a longtime Burger King franchisee in San Diego, said. Texas Pacific Group, a private-equity firm in Fort Worth , Texas , has long been mentioned among the possible bidders for Burger King. Josephson said that while he believes the firm hasn't made a firm bid for the 11,435-restaurant chain yet, "I can say without hesitation that they are serious" about acquiring the fast- food chain.

"We continue to work with them and provide them with as much information" as possible about the business, Josephson said. But, he said if Texas Pacific did not proceed with a bid, "or if any other legitimate buyer approaches the NFA, we would have a responsibility to work with them."

Josephson said Texas Pacific had impressed his group as not being "dump-and- run guys" who buy a business only to shed it for a quick buck. "They would provide the committed ownership we're looking for," he said.

Texas Pacific representatives couldn't immediately be reached for comment. A spokeswoman for Diageo PLC, London , declined to comment on where the bidding process stood.