MIAMI – Shares of Burger King's parent company rose more than 4 percent from their initial offering price by midmorning Thursday in their first day of trading.
Burger King Holdings Inc. (BKC) sold 25 million shares of common stock at $17 each in its IPO that was priced Wednesday night.
Bu midmorning, the shares trading under the symbol BKC rose 71 cents, or 4.2 percent, to $17.71 on the New York Stock Exchange. They traded as high as $18.10 earlier in the day.
The No. 2 hamburger chain raised $393 million in net proceeds from the offering to pay off debt. The total value of the IPO was $425 million before underwriters' commissions and fees.
Burger King plans to use the proceeds to repay $350 million in outstanding debt, much of it stemming from a $367 million dividend paid in February to its current owners — private equity firms Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners.
Burger King's underwriters will have the option to buy up to 3.75 million more shares if demand is high enough, but Burger King would not receive any of those additional proceeds, the company said.
The sale of 25 million shares represented about 19 percent of the company's overall shares, putting the company's value at about $2.25 billion. That compares to biggest burger chain, McDonald's Corp.(MCD), which has a market value of about $43 billion, while No. 3 Wendy's International Inc. is worth about $7 billion.