Industry News | April 19, 2002

Diageo Wants More Than $2.3 Billion for Burger King,

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New York, April 19 (Bloomberg) – As reported by Mark Lake: Diageo Plc, the world's No. 1 distiller, is seeking bids of more than $2.3 billion by the end of next week for its Burger King unit as it plans to focus on its drinks businesses, said people familiar with the auction.

Bain Capital Inc., Blackstone Group LP, Texas Pacific Group and Thomas H. Lee Partners LP are among the buyout firms that plan to bid, the people said. Tricon Global Restaurants Inc., owner of KFC and Taco Bell, also has expressed interest in buying the world's second-largest hamburger chain, they said.

Diageo sent financial information on Burger King to prospective bidders last month in the hope of selling the unit by the third quarter. Diageo first announced plans for a partial sale in June 2000 as part of Chief Executive Officer Paul Walsh's effort to concentrate on Smirnoff vodka, Guinness and other drinks. The London-based company sold the Pillsbury food unit for $10.5 billion last year.

``Once they get out of their last non-beverage business they will be able to really focus on beverages,'' said Tom Russo, partner with Gardner Russo & Gardner, which manages $1 billion and has about 3 million Diageo shares. ``This is the last piece.''

Spokesmen for Bain, Texas Pacific, Blackstone, Thomas Lee and Tricon all declined to comment. Isabelle Thomas, a spokeswoman for Diageo, declined to comment.