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Burger King Confirms Deal to Buy Tim Hortons for About $11 Billion

Published on August 26, 2014, by

Burger King BKW -2.39% Worldwide Inc. agreed to buy Canadian coffee-and-doughnut-chain Tim Hortons Inc. THI.T +8.89% for about $11 billion, confirming plans to move the iconic American brand north of the border under a tax inversion deal.

The relocation of a such a high-profile American brand is likely to elevate the debate over tax inversions at a critical time as U.S. lawmakers look to stem the growing wave of company departures.

Adding a twist to the deal, legendary investor Warren Buffett‘s Berkshire Hathaway Inc. BRKB +0.33% is providing $3 billion in preferred equity financing, throwing him into the center of the debate over U.S. tax policy.

The deal would create the world’s third largest quick-service restaurant company, with about $23 billion in system sales and more than 18,000 restaurants in 100 countries. The new global company will be based in Canada, though each brand will be managed independently after the deal’s completion, the companies said.

“By bringing together our two iconic companies under common ownership, we are creating a global [quick service restaurant] powerhouse,” said Alex Behring, executive chairman of Burger King and managing partner of 3G Capital.

Tim Hortons shareholders will receive C$65.50 in cash and 0.8025 shares of the new company for each share, valuing the restaurant company’s stock at C$94.05 based on Monday’s close. As an alternative, shareholders will be able to choose to receive either C$88.50 in cash or 3.0879 shares of the new company.

The acquisition of Tim Hortons, which is Canada’s largest quick-service chain and has a market capitalization of about $10 billion, would have to win Canadian government approval. That means Burger King, which is controlled by Brazilian private-equity firm 3G Capital Management, would have to show that the deal provides a so-called net benefit to Canada.

Tim Hortons, which today operates in only a handful of countries outside Canada and the U.S., is synonymous with Canada, with more than 3,600 Canadian shops located in strip malls and street corners in both small towns and big cities. It is named after its co-founder, a former defenseman for the Toronto Maple Leafs NHL franchise.

3G Capital will own about 51% of the new company. Berkshire Hathaway, which previously joined with 3G to buy H.J. Heinz & Co. in 2013, won’t be involved in the management or operation of the business.

In order to fund the deal, Burger King has obtained commitments for $12.5 billion of financing for the cash portion, including commitments for a $9.5 billion debt financing package led by J.P. Morgan JPM +0.88% JPMorgan Chase & Co. U.S.: NYSE $59.86 +0.52+0.88% Aug 26, 2014 11:20 am Volume (Delayed 15m) : 3.10M P/E Ratio 15.37 Market Cap $223.19 Billion Dividend Yield 2.67% Rev. per Employee $404,867 60.0059.7559.5059.2510a11a12p1p2p3p 08/26/14 HEARD ON THE STREET: Copper Mi… 08/26/14 Burger King Confirms Deal to B… 08/26/14 United Engineers Sells Car Bus… More quote details and news » and Wells Fargo. WFC +0.38%

The companies said Burger King Chief Executive Daniel Schwartz will become CEO of the new company. Mr. Behring will be executive chairman, and Tim Hortons CEO Marc Caira will be vice chairman. Mr. Schwartz and Mr. Caira will continue to serve as CEOs of their respective companies during the transition period, the companies said.

Shares of the new company will be traded on the New York Stock Exchange and the Toronto Stock Exchange.

Miami-based Burger King, founded in 1954, operates in about 14,000 locations in nearly 100 countries. The chain, which 3G Capital acquired in 2010, has become a franchiser that collects royalty fees from its franchisees—not an operator of restaurants. Since the 3G Capital acquisition, Burger King has significantly increased its presence in Europe, the Middle East, Asia and Latin America.

In an inversion, a U.S. firm relocates—usually through a merger with a smaller company—to a country where tax rates and rules are perceived to be friendlier, but it typically continues to be managed from the U.S.

original article via: WSJ

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Amazon to buy live-stream gaming site Twitch ($970 million)

Published on August 25, 2014, by

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Amazon, in its efforts to increase its video-streaming offerings, plans to buy live-streaming video game site Twitch for more than $1 billion, according to media reports published Monday.

The companies could announce the deal as early as Monday, unnamed sources told The Wall Street Journal.

Amazon and Twitch did not immediately respond to requests for comment. The news was first reported by The Information.

If true, the deal would help Amazon expand its video-streaming service, as it pits its fledgling Amazon Prime Instant Video streaming service against streaming giant Netflix. The Internet retailer has made it clear that it is committed to growing its video offerings, including the development of original content.

Twitch is a video platform that streams content geared toward gamers, including live gaming footage, commentary, and online shows. While Twitch did not comment on the reported deal, the company said Monday it counts more than 1.1 million unique broadcasters per month, up from 600,000 in November last last year. Their videos are reaching more than 55 million gamers, up from 45 million before. On average, Twitch said, users watch 106 minutes per day.

Gaming is not an area where Amazon has made a lot of progress. Although it launched its Amazon Game Studios two years ago, it has sparse offerings. But, the retailer clearly wants a piece of the video game market. When it unveiled its media-streaming device Fire TV in April, it also rolled out an optional controller for video game play.

Twitch, launched in June 2011 by Justin.tv co-founders Justin Kan and Emmett Shear, made headlines this year for the live streams of a crowdsourced game of Pokemon and goldfish playing classic video games. Videos on the site can also be streamed on Microsoft Xbox and PlayStation 4 game consoles.

Google was reportedly in talks to buy Twitch earlier this year. The acquisition would have expanded the scope of YouTube’s video ambitions. Neither company commented on the reports.

The deal ultimately fell through, an unnamed source told Recode, and Amazon stepped in to pursue the streaming site.

original article via: CNET

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Windows 9 unveiling set for September 30, report says

Published on August 21, 2014, by

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Microsoft’s Windows 9, the successor to the widely panned Windows 8, could be shown off at the end of next month, according to a new report.

Microsoft is planning to hold a special press event on September 30 to show off Windows 9, The Verge is reporting, citing people who claim to have knowledge of the company’s plans. The date is currently “tentative,” according to the report.

It’s not yet clear whether Windows 9 will actually be known as Windows 9. The operating system is currently code-named Windows Threshold, though it’s highly likely that Microsoft will keep its numbering scheme with the next platform.

Last week, CNET sister site ZDNet reported that Microsoft is planning to launch a “technology preview” of Threshold at the end of September or early October. The report from Mary Jo Foley indicated that users would be able to try out the operating system, but would need to have software updates automatically downloaded to the platform each month.

Whenever Threshold makes an appearance, it’s expected to come with a wide range of improvements, including a “mini” Smart Menu, separate windows for Metro-style applications running on the desktop, and support for virtual desktops.

According to The Verge’s sources, Microsoft will be showcasing some of those improvements and new features at the event on September 30. The operating system should launch as a beta preview soon thereafter.

In a statement to CNET, Microsoft was succinct in its response to the news, saying only that it has “nothing to share” at this point.

original article via: CNET