Donn Beloff on Buying Burger King

Burger King is about to go public again, after being taken private about two years ago by 3G Capital. Donn Beloff, a mergers and acquisitions attorney in Fort Lauderdale, is heading up the Greenberg Traurig team representing Justice Holdings, a London investment firm. Justice is paying $1.4 billion to 3G Capital in a leveraged buyout for about 29 percent control of the fast-food chain.

Beloff tells how everything had to be hush-hush in the early stages: 

"Under [London Stock Exchange] rules, if information concerning the proposed transaction became public, trading in Justice's shares would have been suspended," Beloff explained. "In addition, Burger King wanted to advise its franchisees of the proposed transaction directly, rather than having them hear about it in a news report.

"In Washington, you quickly learn that, if more than one person knows about something, it's not a secret. Consequently, the number of people who knew about the transaction was strictly limited, code names were used, documents were password-protected, and most meetings involving Burger King personnel were held off-site. We did manage to keep the transaction secret until the formal public announcement in the UK on April 3."

Getting to that point was no easy feat. "The transaction was extremely complicated because of the structuring required to reduce the tax impact on the Justice shareholders," Beloff said. "That structuring included the creation of a Delaware corporation and Delaware LLC to complete the acquisition, the distribution of the shares of the Delaware corporation to Justice's shareholders, the listing of the Delaware corporation's shares on the New York Stock Exchange and the dissolution of Justice following the consummation of the transaction."

Justice was very happy with the deal. Bill Ackman, one of the company's directors and co-founders, said, "When I learned that Burger King was interested in a possible transaction with Justice, I brought the opportunity to my Justice founding partners to consider. They liked what I saw, a 58-year-old global brand, and a simple, predictable, free cash-flow growth franchise in the process of transformation into a pure brand royalty business. The results to date have been remarkable."

Burger King and 3G were represented by Kirkland & Ellis, whose team included New York Super Lawyers listees Stephen Fraidin, William Sorabella and Joshua Korff.