Sky News has learned that Bridgepoint Group is in preliminary talks with investment banks over an auction of one of the country’s best-known fast food chains.
Discussions are unlikely to result in a formal sales process for another 12 months, according to insiders, although they added that one could start in early 2022 if sales continue to grow at a significant rate.
The potential banker appointment is likely to alert rival private equity firms and potential buyers, and comes exactly one year after Burger King UK chief executive Alasdair Murdoch warned of job losses substantial and restaurant closures as the COVID-19 crisis has decimated the hospitality sector.
Although there are few public details on its recent financial performance, the chain has reportedly rebounded strongly in recent months, boosted by an expanded portfolio of drive-through restaurants.
Burger King also has partnerships with Deliveroo, Just Eat and UberEats, which have helped keep sales momentum going during the UK’s various lockdowns.
The chain is said to have dozens of other drive-through outlets in the pipeline.
Hotel bosses have warned in recent weeks that ‘pingdemia’ caused by workers being forced to self-isolate after being contacted by the NHS Test and Trace app has plunged the industry into another crisis .
Since March of last year, dozens of restaurant chains, including Byron, Carluccio’s and Pizza Express, have been forced into emergency insolvency or restructuring proceedings.
Burger King UK itself evaluated a corporate voluntary arrangement (CVA) mechanism for one of its subsidiaries as it sought to shut down a small number of its 530 locations.
Mr Murdoch was an early and outspoken critic of the government’s policy towards the hotel sector after the initial outbreak of COVID-19 cases.
In March 2020, he said the chain would not pay its quarterly rent bill and called on business owners to work with restaurant operators to resolve the growing stalemate between them.
In total, UK Hospitality, the trade association, recently estimated that the industry has lost around £ 80 billion in sales since the start of the pandemic.
Burger King UK’s improved performance reflects the belief of many industry executives, however, that pent-up consumer demand will provide a recipe for further expansion in the years to come.
A new vehicle backed by former J Sainsbury CEO Justin King is set to be listed in London to buy catering assets, while other chains, such as Tortilla and Yo! Sushi, are also planning to go public.
Burger King UK has around 150 of its outlets in the UK and has bought more from franchisees in recent months in an effort to increase profitability.
In May, it acquired Zing Leisure, an Essex-based franchisee that operated 17 Burger King restaurants.
Mr Murdoch recently unveiled plans to phase out some of his meat dishes and switch to a 50% plant-based menu by 2031 amid growing demand for vegetarian and vegan options.
The company also pledged to phase out all single-use plastics in its restaurants by 2025.
Burger King UK is chaired by Martin Robinson, a leisure industry veteran who led Center Parcs’ European operations and has since chaired privately funded companies including Casual Dining Group, Parkdean Resorts, Travelodge and Wagamama.
Bridgepoint, which saw its shares soar after floating in London this month, has owned Burger King UK since late 2017.
The chain is believed to continue to have significant growth potential given its UK domain is only about a third the size of rival McDonald’s.
Bridgepoint owns around 80% of the UK estate and is also a shareholder in the French Burger King company – although it is not clear whether he could seek to merge them before an exit.
A source said an initial public offering of the UK deal was also a possible option.
The Burger King brand is owned globally by Restaurant Brands International, which is listed in New York.
An analyst said the UK company could be worth more than £ 500million in the context of a recently announced deal that would see Cinven, another private equity firm, take over the Iberian master franchise from the fast food giant .
Burger King UK was unavailable for comment over the weekend, while a spokesperson for Bridgepoint said no adviser had been appointed and the company was “just exploring growth options for the [Burger King UK] company “.