Are private equity firms about to have it their way?

Shares of Burger King (NYSE: BKC) opened 16% higher today, after a Wall Street Journal report claiming that three private-equity giants with existing stakes in the burger chain may try to buy it out.

It's easy to see why BK may be eyeing an exit strategy. Its enviable streak of 21 consecutive quarters of positive worldwide comps ended in the final quarter of fiscal 2009.

Burger King posted grim results for fiscal 2010 last week. Worldwide comps fell by 2.3%, dragged down by a 3.9% slide in North America. The franchising giant was able to pay down its debt and expand its kingdom, but earnings still clocked in lower.

The media loves to gush about McDonald's (NYSE: MCD) success with both bargain-priced value meals and pricier premium items. However, smaller burger-flippers aren't doing so hot:

  • Wendy's/Arbys (NYSE: WEN) has been trading in the single digits for nearly three years.
  • Analysts see Jack in the Box (Nasdaq: JACK) posting a 25% decline in earnings for the current fiscal year, with an unflattering 8% haircut on the top line.
  • Sonic (Nasdaq: SONC) shares hit a 52-week low this summer.
  • Red Robin Gourmet Burgers (Nasdaq: RRGB) took a hit last month, after announcing that it was replacing its CEO and reporting a sharper-than-expected dip in quarterly profitability.

If buyers are hungry, clearly there are bargains to be had.

Of course, buyout chatter can be a self-negating prophecy. The same private-equity firms that figured they could steal an unloved Burger King on the cheap won't chase the euphoria now.

It would not surprise me one bit to see a couple of burger names taken private over the next few months. However, any potential purchase is unlikely to come after a speculative run-up.

Which of these burger chains do you think will be acquired first? Let us know in the comment box below.

Motley Fool Options has recommended writing puts on Jack in the Box. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Longtime Fool contributor Rick Munarriz lives in Burger King's hometown of Miami, and hits "the BK lounge" often. He does not own shares in any of the companies in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.