Burger King Owner Said in Advanced Talks to Buy Popeyes (1)

(Bloomberg) -- Restaurant Brands International Inc., the owner of Burger King, is in advanced talks with Popeyes Louisiana Kitchen Inc. about a takeover of the fried-chicken chain, according to people familiar with the matter.

Negotiations between the companies are ongoing, and a transaction could be announced as early as this week, said the people, who asked not to be identified as the details aren’t public. Talks could still fall apart, the people said. Popeyes has a market value of about $1.37 billion, while Restaurant Brands is worth $25 billion.

The companies held talks in the summer but were unable to reach an agreement at the time, the people said. Burger King renewed its interest in Popeyes late last week and made an offer that was mainly cash, one of the people said. The fried-chicken chain then contacted possible counter bidders over the weekend, however no competitive offer materialized, the person said.

A spokeswoman for Popeyes declined to comment. A representative for Restaurant Brands didn’t immediately respond to a request outside of regular business hours.

Berkshire Hathaway Tie

Restaurant Brands, backed by Brazilian private equity firm 3G Capital, was created in 2014 when Burger King Worldwide Inc. bought Tim Hortons Inc. and relocated its headquarters to the coffee chain’s home country of Canada. Warren Buffett’s Berkshire Hathaway Inc. was brought in by 3G to provide financing for the deal, and still holds a stake in Restaurant Brands.

Popeyes, based in Atlanta, can trace its roots back to a single fried-chicken shop opened in New Orleans in 1972. It operated and franchised more than 2,600 restaurants in the U.S. and 26 other countries as of Oct. 2, according to its third-quarter earnings report.

Fried chicken is enjoying a renaissance, as Americans are set to eat more of it this year than ever before on record -- 91.7 pounds per person, according to the National Chicken Council. Consumption has surged more than 225 percent since 1960, even as the amount of red meat people eat has declined.

Fast-food restaurants are jumping on the chicken bandwagon as customers clamor for poultry. Taco Bell, a division of Yum! Brands Inc., introduced a new chalupa last month with a shell made out of fried chicken rather than corn or flour. Shake Shack Inc., famous for its milkshakes and hamburgers, last year started selling a fried-chicken sandwich that already has become one of its top sellers.

Reuters reported Feb. 13 that Restaurant Brands had approached Popeyes about a possible acquisition, citing people familiar with the talks. The New York Post then reported a day later that Restaurant Brands was interested in buying Popeyes a few months ago but had walked away from the deal, also citing a person it didn’t identify.

Dealmaking in the restaurant industry picked up last year, with a total of $7.3 billion of acquisitions announced, compared with $4.2 billion in 2015, according to data compiled by Bloomberg. JAB Holding Co., the investment company of Austria’s billionaire Reimann family, agreed to buy Krispy Kreme Doughnuts Inc. for $1.35 billion in May, while Heineken NV teamed up with Patron Capital to bid for U.K. pub operator Punch Taverns Plc’s shares in December.

(Updates with chicken-demand context and earlier reports starting in seventh paragraph.)

--With assistance from Craig Giammona and Doni Bloomfield

To contact the reporters on this story: Ruth David in London at rdavid9@bloomberg.net, Ed Hammond in New York at ehammond12@bloomberg.net.

To contact the editors responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net, Elizabeth Fournier at efournier5@bloomberg.net, Aaron Kirchfeld, Amy Thomson

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