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Apr-18-2008Peltz's Trian Says Wendy's Spurned Acquisition Offers (Update3)(topic overview)
CONTENTS:
- Trian, run by activist investor Nelson Peltz, also said that it sent a letter to Wendy's on April 18, in which it stated that it was 'very concerned' about the current direction of Wendy's and added that it intends to contact Wendy's shareholders directly to hold a special meeting on the Wendy's future. (More...)
- Trian, which controls a 9.8 percent stake, plans to contact shareholders to call a meeting on the future direction of the company after the board rejected the firms' proposals, May wrote in the letter dated today. (More...)
- Trian was informed that a special committee of Wendy's board had rejected two acquisition proposals made by Trian and Triarc Cos. (TRYB). (More...)
- Before any transaction is considered, shareholders should be fully updated on the current financial condition of the company, including sales, profits and margins. (More...)
- Wendy's declined to comment on Friday. (More...)
- Triarc, the owner of the Arby's fast-food chain, offered to buy Wendy's last year. (More...)
- An SEC Filing this morning shows activists are going to go after Wendy's International Inc. (NYSE: WEN) with a little more publicity than mere private letters. (More...)
SOURCES
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Trian, run by activist investor Nelson Peltz, also said that it sent a letter to Wendy's on April 18, in which it stated that it was 'very concerned' about the current direction of Wendy's and added that it intends to contact Wendy's shareholders directly to hold a special meeting on the Wendy's future. In a filing with the Securities and Exchange Commission on Friday, Trian said that it and Triarc Cos Inc were informed on Thursday that a special committee of Wendy's board of directors has rejected the acquisition proposals made by them to Wendy's. [1] Trian said it was informed on Thursday that a special committee of Wendy's board had rejected two acquisition proposals made by Trian and Peltz's Triarc Companies Inc. (NYSE:TRY) Trian said it intends to contact fellow shareholders for the purpose of calling a special meeting of the shareholders of the company, at which all shareholders will have the opportunity to vote on the future direction of Wendy's.[2]
Trian said it intends to contact fellow shareholders for the purpose of calling a special meeting of Wendy's shareholders, at which all shareholders will have the opportunity to vote on the future direction of Wendy's. Atlanta, Georgia-based Triarc, the franchisor of the Arby's restaurant system, said it was considering its alternatives with respect to Wendy's and intends to contact and discuss with other shareholders of Wendy's their respective views regarding their investment in Wendy's, the conduct of the special committee and possible strategies to maximize shareholder value. According to Triarc, such strategies should include shareholder participation in a bid by it to acquire Wendy's.[1]
Trian wants shareholders to determine the future of Wendy's and it intends to contact other shareholders to call a special meeting to give shareholders the opportunity to vote on the future direction of Wendy's. This is looking like it is a very unique special situation.[3] We therefore intend to contact our fellow shareholders for the purpose of calling a special meeting of shareholders at which all shareholders will have the opportunity to vote on the future direction of Wendy's.[4]
Nelson Peltz's Trian Partners LP said that Wendy's International Inc. rejected two proposed mergers or takeovers and that it intends to contact shareholders directly to hold a special meeting on the hamburger chain's future.[5] LOS ANGELES (Reuters) - Nelson Peltz's Trian Partners said on Friday it will seek a special meeting of Wendy's International Inc (WEN.N: Quote, Profile, Research ) shareholders after the hamburger chain rejected two separate takeover offers from Trian and the billionaire investor's Triarc Cos Inc (TRY.N: Quote, Profile, Research ).[6]
Activist investor Nelson Peltz's Trian called for a special meeting of shareholders to vote on the direction of the hamburger chain. It said it is "very concerned" about the current direction.[7]
"Trian is very concerned about the current direction of Wendy's,'' May said in the letter. If the chain decides to consider an alternative to a sale, such as a sale of a minority stake, May urged that shareholders be allowed to vote on an agreement rather than leave it in the hands of the committee.[8]
In a filing with the SEC, Trian stated that a special committee of Wendy's board of directors rejected two acquisition proposals made by Trian and Triarc, the operator of the Arby's fast-food chain. The suitors said in a letter that they were "very concerned" about the direction of the company. The SEC filing stated that Triarc is considering its alternatives with respect to Wendy's. Earlier this year, Trian proposed an overhaul of Wendy's board of directors.[9] The other involved buying 100 percent of Wendy's "for over $900 million in cash with the balance in stock," Trian and Triarc said in a letter addressed to Wendy's Chairman James Pickett. In the letter, which was included with a regulatory filing on Friday, the suitors said their proposals would have required the approval of the shareholders on each side of the transaction and that neither was conditioned on the receipt of third-party financing. "Our most recent proposals were summarily rejected in less than 24 hours," they wrote. The suitors also said they want any transaction entered into by Wendy's to be approved by all shareholders, and not just the special committee of the board of directors that rejected the Trian/Triarc takeover proposals.[6] Trian and Triarc were informed that the Wendy's special committee had rejected two acquisition proposals made by Trian and Triarc, which had called for the combination of Wendy's and Arby's and the other involved an acquisition of 100% of Wendy's for over $900 million in cash with the balance in stock. These proposals would have required the approval of the shareholders on each side of the transaction and neither of the proposals was conditioned on the receipt of third party financing.[3]
One of Trian's proposals called for a combination of Wendy's and Arby's, while the other involved an acquisition of 100% of Wendy's for over $900 million in cash with the balance in stock. In his letter addressed to James Pickett, the chairman of the board of Wendy's, and filed with the SEC, Trian's president Peter May said, 'Our proposals would have required the approval of the shareholders on each side of the transaction and neither of the proposals was conditioned on the receipt of third party financing.[1]
In a letter to Wendy's board chairman James Pickett, Peter May, president of Trian and vice chairman of Triarc, said Trian and Triarc learned Thursday that the special committee rejected two offers: One a combination of Arby's and Wendy's and the other a cash offer of more than $900 million plus stock.[10] Trian and its Triarc Cos. affiliate proposed to combine the Arby's restaurant chain with Wendy's, and separately offered to buy the company for $900 million in cash and the balance in stock, Trian President Peter May said in a letter to Wendy's Chairman James Pickett, according to a regulatory filing today.[8]
One proposal called for the combination of Wendy's and Arby's, while the other offered to buy Wendy's for more than $900 million in cash and stock. In February, Trian, run by activist investor Nelson Peltz, proposed to overhaul Wendy's board in a move that would give him effective control of the company.[7] Billionaire investor Nelson Peltz's Trian Partners said Friday in a filing with the Securities and Exchange Commission that it is concerned about future of Wendy's. Wendy's board formed a committee a year ago to determine how to increase its stock price.[10]
The fourth quarter of 2006 also saw the company approving the prospective sale of Cafe Express. The company noted the move as a positive step in its continuing efforts at further enhancing value for its shareholders, franchisees and other shareholders. Wendy's was then challenged with calls for a change by billionaire investor Nelson Peltz who got three seats on an expanded Wendy's board as he pushed for value-enhancing actions.[1]
The move would have resulted in Peltz effective control of the company. In January, Wendy's had announced that the strategic options review by a Special Committee of its Board of Directors was nearing the final stages of the review process. Wendy's set up a Special Committee in April last year to review strategic options to boost shareholder value while releasing its first quarter financial results.[1] Trian said that any alternative transaction entered into by Wendy's should be subject to the approval of the company's shareholders and not just the special committee of the board of directors.[1] Our most recent proposals were summarily rejected in less than 24 hours. If the 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. If shareholders approve a different transaction after having been afforded the opportunity to consider the benefits of the transactions we had proposed, Trian will abide by the will of its fellow shareholders.[4] "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," Trian President Peter May wrote in a letter sent to Wendy's Chairman James Pickett and filed with the Securities and Exchange Commission.[7]
Trian said it believes that any transaction entered into by Wendy's should be subject to the approval of the company's shareholders and not just the special committee.[11]
Trian also said that in the event shareholders approved a different transaction after having been afforded the opportunity to consider the benefits of the transaction that it proposed, it would abide by the will of the shareholders. Noting that Wendy's plans to announce its financial results for the first quarter on April 25, Trian said it expects the company will take any action prior to the announcement of its financial results.[1] Before any transaction is considered, shareholders should be fully updated on the current financial condition of the company--including sales, profits and margins. The Company has publicly stated that it plans to announce first quarter results on April 25 and we expect the Company will not take any action prior to this announcement. It is now time for Wendy's shareholders to decide the future of their company.[4] Wendy's said April 3 that sales at stores open at least 15 months dropped for the second straight quarter as McDonald's Corp. and Burger King Holdings Inc. lured more customers. "It is now time for Wendy's shareholders to decide the future of their company,'' May wrote.[8]
COLUMBUS, Ohio -- A key shareholder of Wendy's International Inc. says the third-largest hamburger chain has rejected two offers to buy the chain and that he wants a special shareholder meeting to discuss the company's future.[10] NEW YORK (AP) -- Shareholder Trian Partners LP said Friday that Wendy's International Inc. rejected two offers it made to buy the company, according to a regulatory filing.[7]
April 18 (Bloomberg) -- Nelson Peltz's Trian Fund Management LP said Wendy's International Inc., the hamburger chain that put itself up for sale last year, rejected two acquisition proposals from the investment firm.[8] BOSTON, Apr. 18, 2008 (Thomson Financial delivered by Newstex) -- Billionaire Nelson Peltz 's Trian Fund Management L.P., a hedge fund, Friday sent a letter to Wendy's International (NYSE:WEN) Inc., saying it is 'very concerned' about the current direction of the company.[2]
"As a large shareholder of Wendy's, Trian is very concerned about the current direction of Wendy's," the letter said.[10] Trian appears to be the lead in the group as far as signing the letter, and the letter says it is very concerned about the current direction of Wendy's.[3]
Trian, which controls a 9.8 percent stake, plans to contact shareholders to call a meeting on the future direction of the company after the board rejected the firms' proposals, May wrote in the letter dated today. [8] May said Trian intends to contact other shareholders for a meeting to vote on Wendy's future direction.[10]
Trian was informed that a special committee of Wendy's board had rejected two acquisition proposals made by Trian and Triarc Cos. (TRYB). [11] According to the letter, Wendy's rejected two acquisition proposals made by Trian and Triarc Co., which owns fast-food chain Arby's.[7]
One proposal called for the combination of Wendy's and Arby's while the other involved an acquisition of 100% of Wendy's for over $900 million in cash with the balance in stock.[4]
Subsequently, in a filing with the SEC in November 2007, Wendy's revealed a proposal from Triarc Companies, Inc. and Trian Fund Management, L.P to purchase 100% of Wendy's equity. Wendy's indicated the price by Triarc was below the valuation range of $37-$41 per share, or a total of $3.2 billion-$3.6 billion offered by Triarc in its initial indicative offer on July 30, 2007. Triarc later stated it might be prepared to increase its valuation depending on the results of its due diligence.[1] Peltz and Trian currently hold a 9.8% stake in Wendy's, whose shares closed Thursday at $25.10.[11] Peltz beneficially owns 8.6 million Wendy's shares, representing a 9.8% stake in the Dublin, Ohio-based company.[7] The company is expected to report a profit of $0.17 per share, up from last year's mark of $0.15 per share. In its last earnings release, which came out on February 4, Wendy's reported income from continuing operation for the fourth quarter of $14.1 million, or $0.16 per share. This compared to $9.9 million or $0.09 per share in the prior year.[9]
Peltz has pressured the chain to sell itself after it underperformed competitors. Wendy's board appointed a committee last April to explore a possible sale after the company spun off its Tim Hortons coffee -and-doughnut chain, the biggest driver of its profit in recent years.[8] Peltz's group has invested in other companies including Cadbury Schweppes PLC (CSG), specialty chemical company Chemtura Corp. (CEM) and luxury retailer Tiffany & Co. (TIF). Earlier this year, Trian proposed an overhaul of Wendy's board of directors.[1]
Wendy's Chairman James Pickett said Jan. 28 that the strategic review "is in the final stages.'' Turmoil in the financial markets, resulting in tightening credit, delayed the sale process, he said. In February, Peltz said he plans to nominate six candidates to the company's board.[8] Wendy's directors have been weighing a sale of the company since June 2007 under pressure from Peltz, who has been pressing for a better financial performance. Earlier this month, Wendy's said first-quarter sales at restaurants open at least 15 months fell at both franchised and company-owned locations, hurt by bad weather and an early Easter.[6]
Wendy's noted that the review process took longer than anticipated on account of the turmoil in the financial markets. The Dublin, Ohio based company had completed its spin-off of Tim Hortons in the third quarter of 2006, followed by the sale of Baja Fresh Mexican Grill during the fourth quarter of 2006.[1] In the first quarter, sales at U.S. company stores open at least a year, considered a key indicator of a retailer's success, fell 1.6 percent and 0.1 percent for franchised stores. Wendy's is scheduled to release its first quarter results April 25. It has not set a date yet for its annual meeting, which normally occurs in the spring.[10] For the recent first quarter, Wendy's reported lower average same stores sales, hurt by a shift in Easter holiday and severe winter weather.[1]
Revenue slumped at Wendy's following the death of founder Dave Thomas in January 2002, with sales at older stores dropping six quarters in a row before former CEO Jack Schuessler resigned in April 2006. He was replaced by Kerrii Anderson.[8]
Before any transaction is considered, shareholders should be fully updated on the current financial condition of the company, including sales, profits and margins. [3] We checked Capital IQ's database and the company isn't an easy one to push around, although it isn't exactly one that can lock the doors and pray for the best while the world burns. It requires a 67% vote by the board to approve any transaction, and 75% of shareholders are need to approve any transaction without board approval.[3]
Our proposals would have required the approval of the shareholders on each side of the transaction and neither of the proposals was conditioned on the receipt of third party financing.[4]
Trian also said that it will seek to call a special meeting of shareholders.[9]
Billionaire investor Nelson Peltz is a 9.8% stakeholder in Wendy's and is also chief executive officer of Trian and chairman of Triarc.[1] Activist investor Nelson Peltz says he's 'very concerned' about the fast food chain's current direction.[7]
Wendy's declined to comment on Friday. It said in January that the review was nearly complete. Through Trian and with his allies, Peltz controls 9.8 percent of Wendy's stock, according to the regulatory filing. [10] Wendy's fell 10 cents to $25 by 11:10 a.m. in New York Stock Exchange composite trading.[8] Wendy's shares rose 8 cents to $25.18 in late morning trading Friday. That was still closer to the low end of its 52-week range of $22.18 to $42.22, which had been reached last summer, not long after the special committee was formed.[10] In Friday's regular trading session, WEN is trading at $25.00, down $0.10 or 0.40% on a volume of 0.97 million shares.[1]
Wendy's shares were basically unchanged pre-market after closing at $25.10 yesterday, but shares are now up almost 1% at $25.34 right after the open.[3]
Triarc, the owner of the Arby's fast-food chain, offered to buy Wendy's last year. [8] One proposal called for combining Wendy's and Triarc's Arby's sandwich chain.[6]
An SEC Filing this morning shows activists are going to go after Wendy's International Inc. (NYSE: WEN) with a little more publicity than mere private letters. [3] Peltz and other activist shareholders have pushed Wendy's to make big changes, including spinning off and selling operations and slashing corporate expenses.[10] Peltz gained three seats on the company's board last year and Trian has proposed expanding the board to 15 members.[10] Total revenue for the fourth quarter edged down 0.1% to $596.021 million from $596.378 million last year.[9]
SOURCES
1. Trian Says Wendy's Rejected Two Acquisition Proposals - Update [WEN] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
2. Trian Fund Management very concerned about Wendys current direction
3. 24/7 Wall St.: Activists Come Knocking Harder At Wendy's Doors (WEN, TRY)
4. Letter From Trian to Wendy's - WSJ.com
5. Free Preview - WSJ.com
6. Trian says Wendy's rebuffs 2 takeover offers | Reuters
7. Wendy's rejects two buyout offers - Apr. 18, 2008
8. Bloomberg.com: Worldwide
9. Trian Says Wendy's Rejected Two Offers [WEN] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
10. Wendy's investor wants special shareholder meeting | Chron.com - Houston Chronicle
11. Trian 'Very Concerned' With Wendy's Current Direction
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