U.S. Markets closed

Burger King owner could buy Popeyes as early as this week

Sarah Whitten
Souce: Popeyes | Facebook

Burger King and Tim Horton's owner Restaurant Brands International (Toronto Stock Exchange: QSR-CA) is nearing a deal to acquire Popeyes Louisiana Kitchen (NASDAQ: PLKI), according to a Reuters report.

First reported last week, the deal could help the Georgia-based Popeyes reach more global diners and boost Restaurant Brands' already strong roster of restaurants. A deal could be announced as early as this week, sources told Reuters.

Shares of Restaurant Brands were slightly positive on Monday, while shares of Popeyes were slightly negative.

Some analysts have welcomed the idea of a deal.

"In our view, a proposed buyout of PLKI by QSR is plausible. We believe the Popeyes acquisition would provide Restaurant Brands a concept that provides steady organic and unit growth in both the North American and overseas markets," Stephen Anderson, an analyst at Maxim Group, wrote in a research note last week.

He added that Popeyes has "shown stronger performance worldwide in the past two years" compared to Restaurant Brands' Burger King and Tim Horton's chains.

However, some analysts are skeptical about the deal.

"The most apparent question to us is what does Restaurant Brands gain from acquiring Popeyes?" Andrew Charles, a Cowen analyst, wrote in a research note last week. "In our view, Restaurant Brands has not accomplished the primary objective of acquiring Tim Horton's, which was growing the brand internationally."

Charles noted that it took the company longer than expected to sign franchise development agreements in the Phillippines, United Kingdom and Mexico. He suggested that this could mean that Restaurant Brands is not "ready to acquire another brand."



More From CNBC