Burger chain Shake Shack sets IPO pricing

<p>Shake Shack expects a $14-$16 price per share.</p>

Burger chain Shake Shack said it expected its initial public offering (IPO) to be priced at $14-$16 (£9 – £10.5) per share, valuing the company at up to $568 million. It plans to sell five million Class A shares in the offering, with a view to raise $80 million.

The company, which started as a single hot dog cart in New York City, now operates 63 restaurants around the world, including 36 in the United States.

It is known for its burgers, hot dogs and milkshakes, and has developed a cult following since it was founded in 2001. The chain calls itself the modern day "roadside" and focuses on natural ingredients, with hormone-free and antibiotic-free beef. It’s known for its long lines and its vibrating pagers that signal when an order is ready.

Shake Shack generated nearly $79 million in sales for the first nine months of 2014, and plans to open ten new company-operated stores each year, with a goal of reaching 450 in the long term, a regulatory filing shows. The company hasn’t specified the timing for reaching that number.

The offering follows a string of successful IPOs by casual dining chains last year, including Habit Restaurants and El Pollo Loco Holdings.

El Pollo Loco's shares soared 33 per cent in their debut in July, while shares of Habit Restaurants' more than doubled in their debut in November, Reuters report.

JPMorgan Chase and Morgan Stanley are the lead underwriters on the IPO. The burger joint has applied to list its common stock on the New York Stock Exchange under the symbol SHAK.

Find up to date information on the FTSE 100 and spread betting strategies at City Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.