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Diageo in Talks to Save Burger King Sale

Consortium of buyers is seeking better terms, but both sides still are committed to the deal, firm says.

November 19, 2002|From Associated Press

Diageo, the world's largest liquor company, tried Monday to salvage its sale of Burger King Corp. after the U.S. investors who had agreed to the deal insisted on more attractive terms.

Talks continued with the investor consortium -- comprising Texas Pacific Group, Bain Capital Inc. and Goldman Sachs Capital Partners -- and both sides still were committed to the deal, London-based Diageo said.

Diageo wants to unload Burger King so it can concentrate on its drinks business, which includes Johnnie Walker scotch and Smirnoff vodka.

The investor group had agreed in July to buy Miami-based Burger King for $2.26 billion. Burger King has more than 11,400 restaurants worldwide and is the No. 2 fast-food chain, after McDonald's Corp.

The consortium asked last week for changes to its agreement with Diageo given the weakened conditions in Burger King's markets and their potential effect on the buyers' ability to obtain financing.

In the latest development, the buyers' group said it could not do the deal as agreed. However, it expressed a desire to continue talks toward "a transaction materially different as to terms and structure," Diageo said.

The company said it still hoped to complete the sale by year's end but was considering other options.

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