Burger King Worldwide Inc. raised its offer price to Tim Hortons’ Inc. executives three times before the coffee chain’s board decided to enter into takeover discussions with the fast food giant.
Documents filed with securities regulators Tuesday also reveal Burger King’s final offer of $88.50 was accepted only after its executives made a number of key promises to the Canadian restaurant company aimed at maintaining the heritage of the Oakville, Ont.-based brand and furthering its international expansion efforts.
Discussions between the two quick-serve restaurant giants began after Burger King Chairman Alexandre Behring, managing partner of majority shareowner 3G Capital, approached billionaire investor Warren Buffett in early March, asking Berkshire Hathaway to provide financing for a deal to combine the two restaurant giants.
“Mr. Buffett responded that Berkshire Hathaway was supportive of a transaction,” a takeover circular filed Tuesday with securities regulators reveals, in the form of a preferred equity investment in a company owning both Burger King and Tim Hortons.
With the Berkshire Hathaway CEO’s assent, Mr. Behring then made overtures to Tim Hortons’ chief executive Marc Caira at a March 20 dinner in Toronto.
By March 24, Burger King and Berkshire Hathaway had delivered a non-binding proposal of $73 per share for Tims’ shares in cash and stock of the combined company.
But after meeting with lawyers and financial advisors, Tim Hortons’ board rejected the $73 offer on April 25, saying it didn’t provide an adequate basis for entering into formal discussions.
Subsequent offers from Burger King of $78 on May 12 and $82.50 on June 27 were also rebuffed, although after the latter offer, Tim Hortons’ board authorized its management team to enter into talks with Burger King to see if the two could agree to a friendly deal.
Written by: Hollie Shaw Source: www.FinancialPost.com
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