Burger King Holdings' shares soared to an 18-month high Thursday after it said it is selling itself to private equity firm 3G Capital for $3.26 billion US.

Its shares closed up $4.73, or 25 per cent, to $23.59, on the New York Stock Exchange, a day after they gained more than 15 per cent on speculation about a deal.

Unemployment has eroded profits at Burger King by reducing spending by its largest market segment: young men. (Paul Sakuma/Associated Press)

The offer of $24 a share is a nearly 46 per cent premium over the company's price before rumours began to circulate about a transaction.

The struggling U.S. economy has hit the profits of Burger King — the second largest American hamburger chain behind McDonald's — as high unemployment has reduced spending by its most important group of customers: young men.

Under the terms of the deal, Burger King chairman and CEO John Chidsey will become co-chairman of the board.

A managing partner of 3G, Alex Behring, will be the other co-chairman.

A consortium of private equity firms that took the company public in 2006 — TPG Capital, Bain Capital Partners and Goldman Sachs Funds — have agreed to tender their 31 per cent stake in the firm.

3G is expected to begin its effort to acquire the outstanding shares by Sept. 17.

With files from The Associated Press