Wendy
Written on September 15, 2008
Shareholders on Monday approved Wendy’s International Inc (WEN.N: Quote, Profile, Research, Stock Buzz) $2 billion buyout by Triarc Cos Inc (TRY.N: Quote, Profile, Research, Stock Buzz), the Arby’s sandwich chain owner controlled by billionaire investor Nelson Peltz.
The deal, which combines Triarc with the No. 3 U.S. hamburger restaurant, is expected to close at the end of September and the merged entity will be called Wendy’s/Arby’s Group Inc, the companies said.
Prior to making its bid for Wendy’s, Peltz had pushed the struggling hamburger chain to cut costs and improve profits as rivals McDonald’s Corp (MCD.N: Quote, Profile, Research, Stock Buzz), Burger King Holdings Inc (BKC.N: Quote, Profile, Research, Stock Buzz) and CKE Restaurants Inc’s (CKR.N: Quote, Profile, Research, Stock Buzz) Carl’s Jr nibbled away market share.
Under terms of the deal, Wendy’s shareholders will receive 4.25 Class A Triarc shares for each Wendy’s share they own guaranteed cash advance loan. Triarc shares closed at $5.38 on Friday, which would assign a value of about $22.87 to Wendy’s shares.
A Wendy’s spokesman said the company has 84 million shares outstanding, which would value the deal at $1.92 billion.
Wendy’s stock was down 21 cents to $22.63 in afternoon trade and Triarc shares fell 2 cents to $5.36.
“It’s a merger of two very mature chains. I just don’t see any momentum” on the part of Wendy’s or Arby’s, said Bob Goldin, executive vice president at restaurant consulting firm Technomic.
Goldin said Technomic has done work for Wendy’s but not Triarc.
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