Industry observers believe Burger King managers are poised to lead a buy-out of the fast-food chain, after persuading Diageo, its parent, to choose a sale over a flotation, according to the Financial Times.

The FT reports that Diageo is now expected to confirm within the next few weeks that it favours a buy-out, having stressed for months that it had not made an official decision on its preferred method of separation.

Analysts are speculating that Diageo may use its interim results to announce a buy-back of shares that could be worth as much as £1.4bn.

Diageo will only say it has 'not yet decided how or when.' Burger King said only Diageo could comment at this stage.