Wendy’s sold to billionaire investor Peltz for $2.34 billion

Source: Exec

Date :25/04/2008 03:45:31

After a lengthy pursuit, Nelson Peltz buys Wendy’s International Inc, the third largest U.S. hamburger chain, in an all-stock takeover.

Mr. Peltz, the owner of Triarc Cos., parent of the Arby’s restaurant chain, will buy troubled Wendy’s for about £2.3 billion in a deal which would create one of the nation’s largest fast-food chains.

Combined, Wendy’s and Arby’s will have 10,000 restaurants and sales of about $12.5 billion.

Declining profits

The deal comes as Wendy's struggles with declining profits and weak sales compared with rivals McDonald's Corp. and Burger King Holdings Inc.

Wendy's said Thursday that its first-quarter profit fell 72 percent to $4.1 million, or 5 cents a share, while revenue fell to $513 million from $522 million a year ago.

Sales at company-owned stores open at least a year, considered a key indicator of a retailer's strength, fell 1.6 percent in the quarter. So-called same-store sales at U.S. franchise restaurants fell 0.1 percent.

Expanding offerings

Under the terms of the deal, expected to close in the second half of the year, Wendy's shareholders will receive 4.25 shares of Triarc Class A stock for each share of Wendy's stock. This valued Wendy’s around $26.78 a share, or a 5.8 percent premium to its closing stock price on Wednesday.

“We believe the combination of Arby’s and Wendy’s will create a powerful new restaurant company and a ‘must own’ restaurant stock with significant upside potential,” Triarc’s chief executive, Roland Smith, said in a statement.

The companies said they planned to expand their breakfast and snack offerings, an effort meant largely to catch up with its rivals.

April 25, 2008