Timing of BK CEO Switch Questioned
By George Anderson
At least two experts on initial public offerings (IPO) find the timing of Greg Brenneman’s resignation as CEO of Burger King, at best, curious and, at worst, harmful, with the company’s first public sale of stock expected soon.
Reena Aggarwal, professor of finance at Georgetown University, said, “With a large IPO like this, you want investors to be focused on valuation issues – not on the implications of a management change.”
Frederick Lipman, an IPO specialist with Blank Rome, said it is “rare” for executive changes such as this to take place noting, “management is the key element of an IPO.”
Burger King has tapped John Chidsey, the fast food operator’s president and CFO, to replace Mr. Brenneman. He immediately sought to quash any negative rumors surrounding the management change. “It portends no bad news,” he said. “Everything is fine with the company.”
Mr. Brenneman, known for turning around troubled businesses, said, “I was really brought in…. to do a certain piece of this turnaround.”
The Burger King board and Mr. Brenneman chose the timing now, he said, because “it was better to go to investors with the long-term, stable management team that is going to be here.”
Burger King expects to conduct its IPO by June 30 pending approval from federal regulators. The company hopes to raise up to $400 million.
Moderator’s Comment: What is your reaction to the timing of Burger King CEO Greg Brenneman’s decision to resign from the company? What will this mean
for the company’s IPO as well as issues it has been dealing with, such as franchisee relations, menu development, marketing, etc.? –
George Anderson – Moderator