Some big public pension funds may have an appetite for Burger King.
Parent company Diageo PLC, London, is considering bids for its Miami-based fast-food giant from several private equity firms whose main investors are pension funds.
Sources say Texas Pacific Group Inc., Fort Worth, Texas, in a partnership with the private equity unit of Goldman Sachs Group, New York, is a leading contender in the bidding war. The asking price is reportedly $2 billion. TPG spokesman Owen Blicksilver would not comment on the firm's Burger King bid.
If the TPG proposal is successful, the $151 billion California Public Employees' Retirement System, Sacramento, one of the firm's largest limited partners, could end up with a hefty slice of the dining chain. CalPERS in 2001 bought a $60 million minority position in TPG and also committed $485 million to its funds. Other TPG limited partners include the $112 billion New York State Common Retirement Fund and $74 billion New York State Teachers' Retirement System, both of Albany; the $35 billion Oregon Public Employees' Retirement Fund, Salem; and the $26 billion Massachusetts Pension Reserves Investment Management Board, Boston.
Even if TPG loses the bid, the pension funds still could get a piece of the chain because they're all investors with at least one of the other private equity firms that are in the running. Those include Blackstone Group, New York, which has teamed with Thomas H. Lee Partners, Boston, to bid for Burger King; and Madison Dearborn Partners LLC, Chicago. Lee spokesman Greg Miller would not comment; Blackstone and Madison Dearborn did not return phone calls.