Burger King Takeover a Good Idea

(Burger King article updated with new information and stock price movement.)

MIAMI (TheStreet) -- Shares of Burger King Holdings(BKC) surged on heavy volume Wednesday as rumors of a potential private-equity takeover circulated on Wall Street.

"There's been a scuttlebutt about a possibility like that for a while now," Janney Montgomery Scott analyst Mark Kalinowski told TheStreet, citing a slew of private equity interest in other restaurant chains this year as well.

"It may be best for the [Burger King] concept to be out of the public eye for a while and allow the new management to concentrate on fixing its challenges," Kalinowski said.

The Wall Street Journal originally reported that one firm interested in acquiring Burger King was 3i Group, a British private-equity firm, citing people familiar with the matter.

But 3i Group emphatically denied such speculations to the New York Times, saying it had no interest in the fast-food chain and that it, a middle-market firm, typically involves itself in much smaller deals than the $2 billion or $3 billion that would be necessary for a leveraged buyout of Burger King.

The Times went on to say that Brazilian-backed 3G Capital was among the interested parties in buyout talks with Burger King, led by Alexandre Behring, a former railroad executive who sat on the board of Jacksonville, Fla.-based CSX(CSX). Behring spent a decade with Latin American private equity firm GP Investments.

At some point in 2008, 3G held a 6.7% stake in another struggling fast-food chain: Wendy's Arby's Group(WEN), the Times noted.

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