NEW YORK Arby’s parent Triarc Cos. Inc. submitted on Monday a bid to acquire Wendy’s International Inc. for an undisclosed price, but one that is less than the company had originally projected, according to a regulatory filing submitted late Tuesday.
While Triarc did not disclose how much it offered to purchase all of the assets of Dublin, Ohio-based Wendy's, it did say the bid "is below the valuation range" of its proposed offer in July, which was between $37 and $41 per share, or as much as $3.6 billion. Bids from interested parties in Wendy's auction were due on Monday.
Activist investor and billionaire Nelson Peltz is a large shareholder and the non-executive chairman at Atlanta-based Triarc, and he has expressed interest in Wendy's for some time. As an investor, he also had pushed for changes at the parent company of the No. 3 burger brand, including the divestures of both the Tim Hortons and Baja Fresh Mexican Grill brands. Through his investment vehicles and their affiliates, Peltz currently controls 9.8 percent of Wendy's outstanding stock. Wendy's currently operates or franchises about 6,600 restaurants. The Arby's system boasts about 3,600 locations.
Triarc said in its Tuesday filing that its offer for Wendy's would be primarily in cash with a portion to be paid in Triarc equity. That would seem to indicate that Triarc's offer would not rely on Wendy's prearranged financing, which according to reports includes highly conditional bank covenants and the terms of which had caused some potential bidders to exit the auction process. It was reported that a former front-runner in Wendy's auction -- a conglomerate of private-equity firms and William Foley, a former restaurant veteran and the current chairman of Fidelity National Financial Inc. -- had decided on Monday not to submit an offer to purchase Wendy's.
Wendy’s so-called staple financing was arranged by its bankers J.P. Morgan and Lehman Brothers, but it has been handicapped by the tight credit markets. The terms are said to include a “backstop loan,” which holds provisions that could allow the banks to back out of the deal should credit markets deteriorate further.
It was unclear at press time whether other interested parties had submitted offers for the chain. Those parties include franchisees Gene Carlisle of Carlisle Corp. and David Karam of Cedar Enterprises, both of whom at one point had expressed interest in buying the franchisor.
Wendy's officials have said they would not comment on the company's strategic review or auction, which began in April.