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Burger King is back with a Whopper-ing debut

June 20, 2012: 10:54 AM ET

Will the third trip to the public markets be the charm for Burger King's investors?

Burger King (BKW) started trading on the New York Stock Exchange Wednesday, and the home of the Whopper quickly popped nearly 7% from its opening price of $14.50.

In early April, the world's second largest hamburger fast food chain announced a new healthier menu replete with salads, wraps and smoothies. (The new bacon sundae is a glaring exception).

Investors are probably hoping its returns mimic rivals Chipotle Mexican Grill (CMG) and Yum! Brands (YUM), home of Pizza Hut and KFC, rather than other fast food chains like McDonalds (MCD) and Wendy's (WEN). Chipotle and Yum! have seen their shares jump 23% and 14% in 2012, while McDonalds and Wendy's have dropped 11% and 15% respectively.

The fast food chain's debut on the NYSE was not an initial public offering though. We're still waiting for the first post-Facebook (FB) IPO. Instead, Burger King returned to the public markets through a reverse merger with U.K. investment vehicle Justice Holdings, which is managed by hedge fund investor Bill Ackman.

Burger King's owners, the private equity group  3G Capital, sold a 29% stake to Justice Holdings  for $1.4 billion in early April.  3G spent $4 billion to take Burger King private in 2010.

For today at least, Burger King's gains are a nice breath of fresh air for  Bill Ackman and his hedge fund Pershing Square. It's been a rough few months for Ackman, who has made a significant investment in the troubled retailer JCPenney (JCP). Shares are down nearly 40% this year.

This is the hamburger chain's third trip to the public markets.  Private equity firms TPG Capital, Goldman Sachs Capital Partners, and Bain Capital took Burger King private in 2002 before reselling shares to the public in 2006.  Those PE firms, which owned 31% of Burger King shares after its IPO, sold their stake to 3G Capital in 2010, which then took Burger King private once more.

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Maureen Farrell
Maureen Farrell
Staff writer, CNNMoney

Maureen Farrell is a staff writer at CNNMoney and covers Wall Street, banking, mergers and the stock and bond markets. Prior to joining CNNMoney, she covered venture capital and entrepreneurs for Forbes, and mergers and bankruptcy for Mergermarket and Debtwire, both divisions of the Financial Times.

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