BusinessWeek says Burger King IPO may not be that promising

An article in this past week's BusinessWeek magazine pointed to details regarding Burger King's IPO that make the prospective deal seem "not that juicy." The

"Burger King's upcoming IPO looks lucrative...for the private-equity firms doing the deal. While they make even more cash, the chain's long-term debt could hit $1 billion."

The article points to the "pay yourself back" idea that has become more and more relevant for private equity firms. "Nowadays private-equity firms often spend hundreds of millions of their own money on an acquisition. Just as often, though, they load up the companies with debt and use the money to pay themselves special dividends and other fees that allow them to profit even if the company itself struggles. Then the backers take the company public, often pocketing the lion's share of the offering.

That is basically how the Burger King saga is unfolding. For investors hoping to get in on the IPO, the question is whether the burger chain is really on the road to recovery. Critics argue that since an initial rebound in traffic after private-equity players bought the company from Diageo PLC, Burger King's sales growth again is starting to lag rivals."