DUBLIN OHIO Wendy’s International has rejected a merger with Arby’s or a newly proposed $900 million buyout, prompting rebuffed suitor Nelson Peltz to call for shareholders to decide Wendy’s fate. —A year after a special board committee began weighing a possible sale of the company,
The No. 3 burger brand’s rejection of what Wendy’s chairman James Pickett called “misleading” twinned proposals came less than 24 hours after the company received them, according to an April 18 letter to Pickett from Peter W. May, president of Trian Fund Management and vice chairman of Arby’s parent Triarc Cos. —A year after a special board committee began weighing a possible sale of the company,
Both Trian and Triarc are controlled by activist investor Peltz, who has made several formal proposals since last year to acquire or take control of Wendy’s. He already controls 8.6 million Wendy’s shares, or about 9.8 percent of its equity, and three seats on the company’s board of directors. —A year after a special board committee began weighing a possible sale of the company,
In May’s letter, disclosed to shareholders through a regulatory filing, he expressed concern about the current direction of Wendy’s and also raised the possibility that the Dublin, Ohio-based company might be considering the sale of a minority stake to another bidder. —A year after a special board committee began weighing a possible sale of the company,
However, Pickett fired back the same day in a letter to May, suggesting that his failure to identify himself as also being vice chairman of Trian I Acquisition Corp.—a so-called blank-check buyout fund that raised $920 million in February through an initial public offering—left Wendy’s shareholders “with a very misleading picture.” —A year after a special board committee began weighing a possible sale of the company,
Pickett also blasted May for “inconsistent” statements and actions in the nine months since Trian first expressed interest in acquiring Wendy’s, including the failure of May’s letter to state that the value ascribed to Wendy’s as part of the proposed Arby’s merger was below a level that Wendy’s had previously told Trian was unacceptable. Pickett also found fault with May’s claim that neither of the new takeover offers were conditioned on any third-party financing, since funds held by Trian I Acquisition belong, Pickett said, to its shareholders, not to Trian or Triarc. —A year after a special board committee began weighing a possible sale of the company,
Wendy’s rejection of those firms’ latest acquisition bids was because of their “inadequacy” and Wendy’s “strong belief” that its shareholders “need to have the special committee process concluded,” Pickett said. He also indicated that the committee would reveal something about its review “in the very near future.” —A year after a special board committee began weighing a possible sale of the company,
A longtime Peltz associate, May recounted in his letter to Pickett that one of the snubbed proposals would have placed Wendy’s, whose mostly franchised system comprises some 6,600 namesake restaurants, under the Triarc corporate umbrella with Arby’s, whose nearly 3,600 sandwich restaurants include 1,148 owned by Triarc. —A year after a special board committee began weighing a possible sale of the company,
The other option, May said, was Trian Fund’s 100-percent acquisition of Wendy’s for more than $900 million in cash and stock—a fraction of the price Peltz had indicated he was willing to pay for the company nine months ago. —A year after a special board committee began weighing a possible sale of the company,
The $920 million IPO by Trian I Acquisition, which began trading Feb. 5, was said to be the second-largest public offering ever by a blank-check outfit, also known as a special-purpose acquisition company. Peltz and associates have been investing in food firms since the 1990s, including Triarc’s 1997 acquisition of bottled-beverage marketer Snapple for about $300 million, which was sold in 2000 for $1.5 billion. —A year after a special board committee began weighing a possible sale of the company,
Compared with Trian Fund’s $900 million offer, Wendy’s has a total market capitalization of about $2.2 billion, based on recent trading prices and number of shares outstanding. Word of the latest Peltz overtures boosted Wendy’s share price 9.3 percent for the week ended April 18, to $25.38 per share. However, the stock still languished $3.20 above its 1-year low, far off its 52-week high of $42.22. —A year after a special board committee began weighing a possible sale of the company,
That high valuation was reached last year amid speculation about buyout bidding, which has since been supplanted by analysts’ suspicions that the slumping burger chain franchisor would choose instead of a sale to attempt an overhaul by replacing senior management, selling corporate restaurants and repurchasing stock. —A year after a special board committee began weighing a possible sale of the company,
Several key senior executives have left the company in recent weeks, and Steve Farrar, who took early retirement as Western region senior vice president in 2006, recently rejoined Wendy’s as chief of North American operations. —A year after a special board committee began weighing a possible sale of the company,
Before the credit markets were rocked as deeply as they have been recently, Peltz had indicated a willingness last July to pay $37 to $41 per share for Wendy’s, or between $3.2 billon and $3.6 billion. However, when Triarc finally made its first formal offer for Wendy’s in November, the suitor said it was for a lower, though undisclosed, price. —A year after a special board committee began weighing a possible sale of the company,
Just a few months later, with that offer still unanswered by Wendy’s, Peltz proposed another scenario for gaining control, with Trian Partners informing securities regulators it was proposing to expand Wendy’s board from 13 to 15 directors and put six seats up for votes at the company’s next annual meeting. —A year after a special board committee began weighing a possible sale of the company,
Analysts said Peltz’s move appeared to be an effort to force an end to Wendy’s prolonged strategic review and to oust Wendy’s chief executive Kerrii Anderson. —A year after a special board committee began weighing a possible sale of the company,
If Wendy’s shareholders approve Trian’s board expansion plan and elected its six nominees, including incumbent Jerry Levin, the Peltz bloc would hold majority rule. If shareholders reject that plan, Trian said, it would nominate Levin and three others, which could give Peltz and his affiliates six of the 13 seats. —A year after a special board committee began weighing a possible sale of the company,
As of press time, Wendy’s still had not set a date for its annual shareholder meeting, which usually is held in May. However, the company said it planned to report first-quarter earnings results April 25. —A year after a special board committee began weighing a possible sale of the company,
May’s letter to Pickett also stated that “if [Wendy’s] special committee now intends to pursue a transaction with another party, such as the sale of a minority equity interest, we urge the board to ensure that any alternative transaction be subject to the approval of Wendy’s shareholders and not just the members of the special committee.” Wendy’s shareholders should be fully updated on the company’s financial condition, including sales, profits and margins, before any further action was taken, May also said. —A year after a special board committee began weighing a possible sale of the company,
Wendy’s had already reported declines in same-store sales for its March 30-ended first quarter, of 0.1 percent at U.S. franchised restaurants and 1.6 percent at the company’s own Wendy’s units. —A year after a special board committee began weighing a possible sale of the company,
In a Feb. 29 letter to shareholders, Wendy’s CEO Anderson boasted that its annual earnings before interest, taxes, depreciation and amortization from continuing operations last year rose 65 percent to $270.9 million, meeting management’s general objective, excluding expenses for the board’s strategic review. She also cited Wendy’s all-time-high average annual net sales per U.S. company-operated restaurant, $1.42 million, and positive 2007 same-store sales. —A year after a special board committee began weighing a possible sale of the company,
However, Wendy’s corporate net profit last year fell 6.8 percent to $87.9 million on flat revenues of $2.45 billion. —A year after a special board committee began weighing a possible sale of the company,