No pun in tended. lol
[ Source ]NEW YORK (Reuters) - Wendy's International Inc <WEN.N> has agreed to be bought by Triarc Cos Inc <TRY.N>, the investment arm of billionaire investor Nelson Peltz, in a deal valued at about $2.4 billion that would bring Triarc's Arby's restaurant chain and Wendy's under one umbrella.
The No. 3 hamburger chain put itself up for sale last June, under pressure from Peltz, who now controls nearly 10 percent of Wendy's shares and has clamored for better results as the chain was losing share to rivals like McDonald's Corp <MCD.N>, Burger King <BKC.N> and CKE Restaurants <CKR.N> Carl's Jr.
Triarc will change its corporate name to include "Wendy's," but Arby's and Wendy's would operate as autonomous units headquartered in Atlanta, Georgia, and Dublin, Ohio, respectively, both companies said.
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"I can see how Wendy's is more valuable in the hands of Triarc," Morningstar restaurant analyst John Owens said. "There can be some significant cost savings here."
Under the terms of the deal, Wendy's shareholders would receive 4.25 Class A Triarc shares for each Wendy's share they own, the companies said on Thursday.
Triarc shares closed at $6.30 on Wednesday, which would assign a value of $26.78 to Wendy's shares, a 5.7 percent premium to their closing price of $25.32 on Wednesday. Wendy's had 88.3 million shares outstanding.
The change in ownership marks a new chapter for the company, which was started in 1969 by former pitchman Dave Thomas, named for his daughter and was responsible for one of the most famous series of television commercials ever for a food company that asked "Where's the beef?"
NEW STRUCTURE
Roland Smith, Triarc's chief executive, will continue in that role for the combined company and will also become CEO of the Wendy's brand.
The new company expects to expand, primarily focused on breakfast meals, global expansion for both brands, and growth through future acquisitions and new unit development.
"Working together with the Wendy's team, we expect to improve margins significantly at Wendy's company-owned stores," Smith said.
The deal, subject to regulatory approvals, is expected to close in the second half of 2008.
Under the terms of the deal, Wendy's shareholders would receive 4.25 Class A Triarc shares for each Wendy's share they own, the companies said on Thursday.
Triarc shares closed at $6.30 on Wednesday, which would assign a value of $26.78 to Wendy's shares, a 5.7 percent premium to their closing price of $25.32 on Wednesday. Wendy's had 88.3 million shares outstanding.
Investment bank JPMorgan Chase advised Wendy's on the transaction.
WENDY'S PROFIT DROPS
Wendy's posted first-quarter income from continuing operations of $4.1 million, or 5 cents per share, compared with $14.5 million, or 15 cents, in the year-earlier period.
The results included pretax expenses of $6.7 million related to the special committee that was weighing the sale and $200,000 of pretax restructuring charges.
Sales at company-owned stores open at least 15 months fell 1.6 percent in the first quarter, while sales at restaurants owned by franchisees were down 0.1 percent.
"We are not satisfied with first-quarter results. We know we must do better and we are focused on driving sales and performance in future quarters," said Kerrii Anderson, Wendy's current chief executive.
The company launched a new advertising campaign and introduced out new hamburgers and sandwich wraps, but it continues to lag rivals McDonald's and Burger King, which have seen results boosted by international sales.
