Burger King Holdings Inc., the second-largest U.S. hamburger chain, is in talks with 3G Capital about a buyout, a person familiar with the matter said.
Shares of the Miami company, which is second to McDonald's Corp., surged the most in more than four years.
A buyout might help Burger King repair relations with franchisees and allow the chain to distinguish itself from McDonald's, said analyst Mark Kalinowski with Janney Capital Markets.
"We've seen quite a bit of private-equity interest in the restaurant space already this year," he said. "At this point in Burger King's history, it may be better off out of the public eye to solve some of the big challenges it faces."
The discussions with New York-based 3G may not lead to a transaction, said the person familiar with the talks, who declined to be identified because negotiations are still in progress. The New York Times reported the discussions Wednesday.
Burger King shares rose $2.41, or 15%, to $18.86, its biggest gain since May 2006, when the company went public.
Burger King representatives didn't return a call or respond to an e-mail. Messages by e-mail, phone and fax to 3G Capital weren't immediately returned.
Sales growth at the fast-food chain has slowed in recent years as more consumers opted to eat at home to cope with the economic slump. The company, led by Chief Executive John Chidsey, also operates in Latin America, Europe and parts of Asia.
Total sales fell 1.4% to $2.5 billion in the year ended June 30, Burger King said last week. The chain gets about two-thirds of its revenue from the U.S. and Canada.
"Any improvement at BKC would need to be topline-driven and would require significant investment," Sara Senatore, an analyst at Sanford C. Bernstein & Co. in New York, said in an e-mail.
TPG Inc., Bain Capital and Goldman Sachs Group Inc. bought Burger King from Diageo in 2002 before selling shares to the public again four years later. Those three companies owned about one-third of Burger King as of June 30.