A Burger King Holdings, Inc. investor has filed a lawsuit claiming some members of the board of directors of BK were in breach of fiduciary duty stemming from the recent sale of Burger King, claiming the deal was too cheap and unfair.
Burger King Holdings, Inc. and 3G Capital announced an agreement in which affiliates of 3G Capital will obtain the stock of Burger King Holdings for $24 per BKC share, or $4 billion, based on the company’s outstanding debt. The board of directors unanimously approved the agreement and the offer represents a 46 percent premium to Burger King’s unaffected share price before recent market rumors.
The plaintiff alleges the defendants attempted to sell Burger King under value to 3G Capital. Shares were traded for more than $22 each earlier this year, but during 2009, shares were up at almost $24 per share. They reached more than $30 per share in 2008.
In 2002 TPG, Bain Capital and Goldman Sachs bought Burger King for about $1.5 billion from Diageo, a British drink company. In May 2006 Burger King went public and TPG, Bain Capital and Goldman Sachs remained holding a stake in the company.
For the past four years Burger King’s revenue jumped annually from $2.2 billion, reported on June 30, 2007 to $2.5 billion reported on June 30, 2010. The company’s net income also increased from $148 million reported on June 30, 2007 to $189 million reported on June 30, 2010.
Burger King Holdings shares were traded at $16.67 per share on Tuesday, Aug. 31, 2010 and rose to almost $19 per share after news of the sale began to spread.
