Diageo, the food and drinks conglomerate which owns Guinness, is planning an initial public offering of its Burger King fast-food business on the New York Stock Exchange.
The move, which could eventually raise £2.5 billion-£3 billion sterling (€4 billion)for Diageo, was accompanied by the surprise announcement that Mr Dennis Malamatinas, the Burger King boss who recently lost out in the race for the Diageo chief executive job, will leave the group.
Mr Paul Walsh, who takes over as Diageo chief executive at the start of next year, said the flotation was the best way to maximise value for shareholders. The group plans to offer 20 per cent of Burger King, the world's second biggest hamburger chain, within 12 months and follow with the remaining 80 per cent after December 2002, with analysts valuing the whole business at up to £3 billion sterling.
Burger King runs 11,037 restaurants in 58 countries and last year made an operating profit of £185 million sterling on turnover of £875 million.
Some analysts interpreted the spin-off as the start of an overdue refocusing of Diageo in the wake of the Guinness-Grand Metropolitan merger that created it two-and-a-half years ago.
It will increase speculation about imminent further restructuring that could see the sale or demerger of Pillsbury, the US food business, and even the Guinness brewing division.
A refocusing of Diageo on spirits would echo proposals by Mr Bernard Arnault, head of the French group LVMH, at the time of the merger when his group was a major shareholder.
Mr Philip Morrissey, drinks industry analyst at Warburg Dillon Read, said: "The suspicion is that this is the beginning of an unbundling of Diageo."
Mr Walsh said the deal was being structured in the most tax-efficient way and the timetable would depend on market conditions. "This is a valuation mechanism that will give some clarity to our shareholders," he said. "I also believe it will allow us to realign and incentivise the management of Burger King."
Shares in Diageo fell 11p to 587p in London yesterday.
