- The Washington Times - Friday, March 28, 2003

CHICAGO, March 28 (UPI) — McDonald's Corp. declined to comment Friday on a report it's planning to sell a controlling stake in its Partner Brands division, which includes Boston Market, Chipotle Mexican Grill and Donatos Pizzeria.

The Deal.com, a financial-news Web site, reported talks were under way with several leveraged-buyout firms and financial sponsors to determine interest in buying 51 percent of the division, which accounts for $1 billion in annual sales from 1,083 eateries.

The hamburger giant has 30,025 McDonald's locations in more than 100 countries, generating $40.46 billion in annual sales.

Former McDonald's Chairman and Chief Executive Officer Jack Greenberg set out to extend McDonald's reach by acquiring other chains but Jim Cantalupo, who replaced Greenberg, has vowed to refocus the chain on its core business.

The proposed sale is part of a restructuring plan that may include eliminating several hundred administrative jobs. Details are expected to be released next month when Cantalupo addresses financial analysts in Las Vegas.

McDonald's posted the first quarterly loss in company history in the last quarter of 2002, $343.8 million.

Shares of McDonald's were up 36 cents, or 2.48 percent, early Friday to $14.86 on moderate volume of 1.9 million shares traded on the New York Stock Exchange.

Oak Brook, Ill.-based McDonald's apparently has delayed plans to introduce healthier cooking oils at its 13,500 U.S. restaurants, a program that was to have been completed last month. Instead, work continues on the process to keep the taste of the chain's fries from deteriorating.

In January, McDonald's announced it would close 719 under-performing restaurants, mainly in the United States and Japan. More than 500 of those closures were expected this year. Late last year, the company said it planned to exit some markets and cut 600 jobs.

McDonald's has been losing market share to rivals for several years and has made major changes to its preparation processes in a bid to improve taste and service.

As an incentive to lure back customers who may have gone elsewhere, McDonald's earlier this month began testing wireless access for customers in 10 McDonald's restaurants in Manhattan, with an eye toward expanding the service to several hundred facilities in three major U.S. markets by year's end.

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