Following days of speculation, Diageo has confirmed that the group buying its Burger King fast food chain, comprising Texas Pacific Group (TPG), Bain Capital and Goldman Sachs Capital Partners, want to revise the terms of the purchase agreement. Diageo said the terms might be revised but said there was a possibility of the deal now not going through at all.

Diageo said that discussions are now taking place and would continue over the next few weeks. "As with any such discussion this may result in no changes to the existing terms, changes to the existing terms, or separation of Burger King Corporation under the transaction to the buying group not proceeding," Diageo said.

The purchase agreement, reached in July, allowed for Burger King Corporation satisfying certain performance targets during the period to completion of the deal and the purchaser's financing. Diageo said the buyer's desire for further discussion of the conditions stemmed from existing conditions in Burger King's markets and the buyer's judgement of their effects on the agreement and its financing of the deal.

The announcement follows considerable speculation that the BK sale had been hit by a downturn in the fast food sector which Diageo said last week had impacted on trading at the chain.

Reports suggested that the consortium wanted to lower the purchase price as it was now having difficulty financing the deal given the new market conditions. A price tag of $2.1 billion had reportedly been mooted. Diageo's chief executive, Paul Walsh, also said earlier this week that Diageo might consider taking some equity as part of the deal. Some observers now believe Diageo will not make its fourth quarter deadline to complete the sell-off.