Updated from 1 p.m. EDT
, the international food and liquor giant, said Thursday that it plans to sell a portion of its
business on the
New York Stock Exchange
, possibly in preparation for a future sale of the entire company.
The company also said Dennis Malamatinas, the chief executive of the world's No. 2 hamburger chain, would step down and resign from the Diageo board on Aug. 30. Colin Storm, chief executive of Diageo's
beer unit, will act as temporary chief executive of Burger King until the company finds a permanent replacement.
The company did not say how much of Burger King it will initially sell, how much money it intends to raise, or when it expects to offer the shares.
Diageo's American depository receipts traded down 9/16, or 1.5%, at 35 7/16 Thursday.
For Diageo, the move to shed a portion of Burger King could be the first step in sifting out the huge patchwork of liquor and food brands that the company owns, following its formation from the merger of
in 1997. Many industry watchers have said Diageo might benefit from focusing on the core, profitable liquor side of its business.
The London-based company, through its
United Distillers and Vintners
group and other units, is the world's No. 1 liquor and spirits maker with such brands as
and Guinness. The company also owns food brands such as
The flotation of Burger King could "encourage hopes of a sale of Pillsbury" and "will point strongly to Diageo mutating into a pure beverages company," which should expand its earnings and share value, said Sandy Soames, analyst at
Cazenove & Co.
in London. Cazenove rates Diageo a buy and has not underwritten stock or debt for the company.
The flotation, and the change in management, could also boost the value of Burger King, some analysts said.
"The history of the restaurant industry strongly suggests that concepts fare better when they are not part of a larger conglomerate," said Mark Kalinowski, restaurant analyst at
Salomon Smith Barney
. "This is a positive concept."
Kalinowski said Burger King's shares are likely to be valued similarly to those of such fast-food rivals as
, but not as highly as
, which has commanded far higher stock valuations because of the large international presence of its brand.
Kalinowski does not cover Diageo, but his colleagues in London rate the stock a neutral. His firm hasn't done underwriting for Diageo in the last five years.