Shares of Burger King Holdings Inc. (NYSE:BKC - News), the second-largest U.S. hamburger fast food chain, on Thursday rose as much as 5 percent in their stock market debut. The shares were up 2.4 percent at $17.40 in early trade on the New York Stock Exchange, retreating from opening gains of over 5 percent. On Wednesday, the shares priced at $17, the high end of the previously expected price range.
The initial public offering of 25 million share, which represents a 19 percent stake in the company, was worth about $425 million, according to an underwriter. It marks the fourth restaurant company to hit the market this year.
Burger King, which was bought by private equity firms Texas Pacific Group, Bain Capital and a Goldman Sachs Group Inc. affiliate (NYSE:GS - News) in 2002 for about $1.5 billion, plans to use the proceeds to pay down debt.
Burger King began as a drive-up Miami hamburger stand in 1954, but has grown to sell its burgers and milkshakes in more than 11,000 restaurants in 65 countries, according to a filing with the U.S. Securities and Exchange commission. It remains dwarfed by fast-food leader McDonald’s Corp. (NYSE:MCD - News), which has about 30,000 restaurants in 119 countries.
Burger King had floundered earlier this decade from mismanagement and declining revenue, but began to revive after the private equity firms bought the company from British drinks company Diageo Plc (London:DGE.L - News).
Burger King has boosted its sales with new menu items like the Angus burger, more breakfast offerings and a quirky advertising campaign. It had posted eight consecutive quarters of increased same-store sales, but stumbled in the first quarter of this year.
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