Diageo, the UK-based global wine and liquor conglomerate, warned Thursday that the $2.26 billion (€2.24bn; £1.43bn) sale of its Burger King unit could be compromised by a sharp fall in the subsidiary’s sales – attributed in part to the current US price war with McDonald’s which itself has registered a substantial fall-off in business.
BK is currently the subject of an agreed bid by a consortium of US financiers – Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners – the flow whose digestive juices has diminished after news of the sales decline.
Under the terms of the agreement, the sale price will be determined by the chain’s performance during the period from July (when the deal was struck) and completion date.
Diageo said the buyers want to discuss potential revisions “in light of the conditions existing in Burger King’s markets and the buying group's judgment of their potential effects”.
According to Diageo’s broker Cazenove, the sales is still “80% likely” to proceed on the basis that the price might be cut by 17% to $1.88bn.
Data sourced from: MediaGuardian.co.uk; additional content by WARC staff