Diageo PLC announced today that it was informed on November 15 by Texas Pacific Group and its partners that a purchase of Burger King from Diageo was no longer possible under the previously agreed upon terms and structure.
In July, TPG agreed to purchase Burger King for a reported $2.6 billion, conditional on the burger chain’s performance. Recent slowdowns in the quick-serve market have pressured financial figures, giving TPG motivation to ask for a change in the terms and structure of the agreement.
Diageo announced several weeks ago that the deal was under scrutiny by TPG. Diageo’s broker, Casenove, cut its projected sale price of Burger King to $1.8 million at the time. Reuters is reporting that TPG may now want to pay as little as $1.5 million.
Diageo says it will continue discussions with Texas Pacific but is “considering the other options available to it.”