Market Watch: McDonald’s Corp. said Wednesday that it will offer a minority interest to the public in the popular Chipotle Mexican Grill chain.
Chief Executive Jim Skinner told analysts at a conference at the company’s Oak Brook, Ill., headquarters that the prospectus would be filed with the Securities and Exchange Commission by the end of October.
Shares of McDonald’s fell 87 cents, or 2.7%, to $31.74 in afternoon dealings on a down day for restaurant stocks.
Skinner expects the initial public offering to debut some time in the first quarter of 2006. He did not, however, indicate how much of the company would be sold to the public.
“This action will optimize Chipotle’s potential and create additional value for McDonald’s shareholders,” he said.
McDonald’s own 90% of Chipotle, while the remaining piece is closely held by investors including the chain’s founder and chief executive, Steve Ells. There are 450 outlets.
The company had said earlier this year that it would consider “strategic alternatives” for Chipotle, including selling a chunk of the chain.
Chipotle has been a fast-growing concept for McDonald’s, ringing up a 34% increase in sales to $430 million in 2004. On average, restaurants deliver $1.2 million in annual sales, according to Technomic Inc., the restaurant-consulting company.
