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Apr-27-2008

Will Triarc Save Wendy's?

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Wendy's International Inc. has agreed to be bought by Triarc Cos Inc., the investment arm of billionaire investor Nelson Peltz, in a deal valued at $2.34 billion U.S. that would bring Triarc's Arby's restaurant chain and Wendy's under one umbrella. (More...)
News of the deal Thursday sent Wendy's shares up 4.2%, or $1.07, to $26.39, while shares of Triarc rose 2.7%, or 17 cents, to $6.47 in 4 p.m. composite trading on the New York Stock Exchange. (More...)
The new board of directors will be expanded to 12 members, including two nominated by Wendy's board, Triarc Chairman Nelson Peltz and Vice Chairman Peter May. (More...)
COLUMBUS, Ohio (AP) - The billionaire investor whose company is purchasing Ohio-based Wendy's is known for pushing corporations to make changes to boost their stock price. (More...)
Longtime restaurant operators in the chain complained that Wendy's was getting away from the path cleared by Thomas. (More...)
Yesterday's disclosure of Pershing Square Capital Management's purchase of a 15 percent stake raised eyebrows because of the timing of the news: A day earlier, Wendy's agreed to be sold to Triarc Cos., parent of Arby's. (More...)
Back out restructuring and suitor-sniffing expenses, and profits still would have clocked in lower at $0.10 a share. (More...)
In a tough environment for restaurants, the long battle by Peltz's Triarc ends with $2.34B all-stock agreement. (More...)
The fast-food giant sees earnings per share jump 31% on strong international sales. (More...)
Pershing has had a stake in McDonald's in the past and has had success buying into undervalued restaurant companies, said John Owens, a Morningstar analyst. (More...)
Eleven months of new homes are sitting on the market, the largest inventory since Sept. 1981, while the median sales price fell from $244,200 to $227,600. (More...)
A support center in Atlanta will oversee all company matters and central service functions, leading to cost savings, according to Triarc. (More...)
The euro against the U.S. dollar fell 1.24% to $1.5692, while the price of gold dropped $19.60 to $889.40 per ounce. (More...)
The investment firm owns enough stock to '''get the attention of other shareholders,''' who still must approve the deal, Lombardi said. (More...)

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Wendy's International Inc. has agreed to be bought by Triarc Cos Inc., the investment arm of billionaire investor Nelson Peltz, in a deal valued at $2.34 billion U.S. that would bring Triarc's Arby's restaurant chain and Wendy's under one umbrella. 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 two companies said Thursday. That would represent a premium of 5.7 per cent to Wendy's shares, which closed at $25.32 Thursday. [1] The Atlanta based chain had been trying to obtain control of the Dublin, Ohio, based chain for over a year. $2.34 billion of Triarc Companies Inc was the number that Wendy's board agreed to today. Pam Thomas Farber, the daughter of founder Dave Thomas whose passing seemed to have doomed the 3rd largest hamburger chains fortunes, expressed her displeasure with the takeover by Triarc Companies Inc. "It's a very sad day for Wendy's, and our family. Wendy's stock price has plummeted over the year and billionaire Nelson Peltz, who is the largest shareholder of Triarc, has made it his goal to takeover the weakened company. Following a poor quarter he finally won over the board who agreed to $26.78 for the company who had traded over $40 a share just a year ago.[2] Atlanta-based Triarc Companies Inc. will pay $2.34 billion for Wendy's, significantly below what the company had been willing to pay for the chain last summer. The all-stock deal calls for Wendy's shareholders to receive 4.25 shares of Triarc stock for each share of Wendy's they own. The deal has been approved by the boards of both companies.[3] Total annual sales include $12.5 billion. They will operate as two separate business units with Wendy's and Arby's staying different. The deal has been approved by the boards of both companies. Wendy's shareholders receive 4.25 shares of Triarc stock for each share of Wendy's stock they own. Roland Smith, the CEO of Triarc, will stay in his role, and also become the CEO of Wendy's.[4] The companies will continue to operate as separate business units -- with Arby's in Atlanta and Wendy's in Dublin, Ohio -- but there will be a consolidated support center in Atlanta to "oversee all public company responsibilities and other central service functions." The boards of both companies have approved the deal. It is an all-stock transaction wherein Wendy's shareholders are to receive 4.25 shares of Triarc stock for each share of Wendy's stock they own. Triarc Chief Executive Officer Roland Smith, 53, is to retain that role and add Wendy's CEO to his titles.[5]

After more than two years of rancorous public exchanges with Wendy's, Mr. Peltz and the company's new management will have to win the trust of franchisees and employees. Mr. Peltz, an investor who is known for being a thorn in the side of companies he feels are ignoring his advice, complained publicly about low restaurant profit margins and poor marketing, among other things. He launched a proxy fight and threatened a board takeover, as well as peppering the board chairman with critical letters. Mr. Peltz will be on the board of the new entity and he is expected to play a key role in the new company. He was previously chairman of Triarc. A series of management teams at Wendy's has already tried many of the things, such as a breakfast menu, that the new owners are suggesting, and they haven't fixed the chain. "It is a difficult time from an economic standpoint in the restaurant industry," Mr. Smith said in an interview. He said Wendy's needs to focus more on differentiating itself from burger rivals McDonald's Corp. and Burger King Holdings Inc. by emphasizing freshness and quality. "I think they have an opportunity to regain that ground," he said. Wendy's shareholders will get 4.25 shares of Triarc stock for each share of Wendy's they own.[6] Wendy's jumped 4.6 percent in New York Stock Exchange composite trading after Triarc said it will offer 4.25 shares for each Wendy's share. That values the chain's Class A shares at about $26.78 each, 5.7 percent higher than yesterday's closing price. Peltz, 65, pressured Wendy's for more than two years to sell itself, and he became the chain's largest shareholder as it lagged behind McDonald's Corp. and Burger King Holdings Inc. Wendy's has been seeking a buyer since April 2007. Peltz said in July he might be willing to pay $37 to $41 s share for Wendy's.[7]

At the time of the deal, Wendy's shareholders could expect a 6 percent premium over Wednesday's closing price of $25.32. Peltz at one time said he might be willing to offer $37 to $41 per share. That was before credit markets tightened and the economy grew weaker, said John Owens, a Morningstar analyst. "I think this is a decent deal for shareholders," Owens said. Future prospects depend largely on the Wendy's brand -- "This is the minnow swallowing the whale here" -- and the company still has decent prospects for a turnaround, Owens said. Triarc laid out its plan to improve profits, including $100 million in annual operations improvements at Wendy's company-owned stores, savings of $60 million through elimination of duplicate jobs, and gains from U.S. and international expansion of both brands. The company also said it will explore creating stores featuring both Wendy's and Arby's in some markets where real estate is costly.[8]

"Ultimately there's a lot to be realized in synergies and improvement of Wendy's, which certainly has been under-earning for a number of years,'' said Michael Gallo, an analyst at CL King & Associates who advises investors to buy Triarc shares. "Obviously it's going to take some time before all that settles in.'' The company plans to grow by extending its breakfast menu to additional locations, and with international expansion, new store openings and acquisitions. Smith, who started working in fast food at McDonald's Corp. when he was 16, sees expansion in international markets partly through co-branding of the Wendy's and Arby's in some restaurants, similar to what Yum! Brands Inc. does. Dave Thomas opened the first Wendy's in 1969, naming the restaurant after his daughter, Melinda Lou, who was nicknamed Wendy. The company went public in 1976, raising $28 million, and by 1997 had opened its 5,000th restaurant. Thomas began appearing in television ads in the late 1980s after Wendy's retired its "Where's the Beef'' advertising campaign, a series of commercials that helped the chain narrow the gap with McDonald's and Burger King in the 1980s.[7] The total value of the deal, based on 87.4 million Wendy's shares outstanding, is about $2.34 billion. "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 as we execute on the many opportunities we see to expand and improve these two very valuable brands," Triarc CEO Roland Smith said in a statement. Triarc plans to change its name to include Wendy's.[9] Wendy's International's ( WEN ) disappointing earnings news was overshadowed by a deal with Triarc ( TRY ), franchisor of Arby's, to purchase the struggling fast-food company in an all-stock deal worth $2.34 billion. It marks the end of a nearly two-and-a-half year campaign by Nelson Peltz, who owns 10% of the company through his ownership of Trian Partners, to force a turnaround at the struggling hamburger joint.[10] The year-long pursuit of Wendy's International Inc. by Triarc Cos. and billionaire owner Nelson Peltz, who also controls the Arby's chain, ended with a $2.34 billion all-stock deal for the restaurant company.[11]

LOS ANGELES, April 24 (Reuters) - Wendy's International Inc (WEN.N: Quote, Profile, Research ) has agreed to be bought by Arby's owner Triarc Cos Inc (TRY.N: Quote, Profile, Research ), the investment arm of billionaire investor Nelson Peltz, in a deal valued at about $2.4 billion, sending shares in each company higher.[12] Fast food chain Wendy's International has agreed to be bought by investor Nelson Peltz's Triarc Cos., in a $2.34bn stock deal that will see Wendy's being merged with Triarc's Arby's roast beef chain.[13]

Triarc Companies Inc, the parent company of Arbys restaurants, agreed to acquire the Wendys International Inc. fast food chain for about $2.3 billion in an all stock deal.[14] NEW YORK (AFP) — Triarc Companies is buying hamburger chain Wendy's International in a 2.3-billion-dollar stock deal aimed at creating the nation's third-largest U.S. fast-food group, the companies announced Thursday. Wendy's shareholders will receive 4.25 shares in Triarc, the owner of Arby's roast beef sandwich chain, for each of their shares.[15] DUBLIN, OH-Triarc Cos., the firm that owns the Arby's fast-food chain, is acquiring Wendy's International in an all-stock deal. Wendy's shareholders will receive 4.25 shares of Triarc class A common stock for each of their shares of common stock.[16]

The chain occupies the number 3 slot behind McDonald's Corp. (MCD) and Burger King Inc. (BKC), companies that have been performing well following the promotion of breakfast menus, snack wraps, and specialty coffee. Under the agreement, Wendy's shareholders will receive a fixed ratio of 4.25 shares of Triarc Class A Common Stock for each share of Wendy's common stock they own. The boards of directors of both companies have approved the deal.[17] A consolidated support center in Atlanta will "oversee all public company responsibilities and other central service functions," the companies said. Both companies' boards have approved the deal, an all-stock transaction in which Wendy's shareholders will get 4.25 shares of Triarc stock for each share of Wendy's stock they own. The transaction is expected to close in the second half of this year.[18]

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.[19] "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.[12]

You might think a sale process that has been languishing since Wendy's put itself up for sale last spring would lead to a lower price. Peltz's offers descended steadily after his initial indication in July that Triac which owns 9.8% of Wendy's might pay as much as $41 a share, an approach that was rejected. In the deal, Wendy's shareholders will get 4.25 Triarc shares for each Wendy's share they own.[20] Some might look at it that way. Others may welcome the deal, considering that the stock was already being supported by expectations of a sale, and, even after a year-long strategic review, the field of rival suitors was distinctly lean. In December 2005, when Mr. Peltz sent a white paper to Wendy's management outlining his grievances, he said that the company's stock, which was trading at around $55 a share, could be worth as much as $88 per share. That was before Wendy's spun off Tim Hortons to its shareholders, so those numbers can't be compared to the current stock price. Wendy's struggled to find direction since its founder and spokesman, David "Dave" Thomas, died in 2002. At the time of Mr. Peltz's initial approach, Wendy's then-chairman, Jack Schuessler, was determined to go it alone: He said in January 2006, "We have a comprehensive plan to deliver value for shareholders today, tomorrow and longer term, and we are executing it." Mr. Peltz and his crew weren't the only ones antagonizing Wendy's: Other large shareholders were urging management in private to do something about the company's fading image and poor marketing strategy. Same-stores sales a key performance measure for the retail industry were in steady decline, as was its stock price.[21] At $26.78 a share, based on Wednesday's closing prices, the value of the deal is significantly less than the $37 to $41 a share Triarc initially said it would be willing to pay for Wendy's in July. That would have put the value of the deal at between $3.2 billion and $3.6 billion. The deal, which still needs approval of both companies' shareholders, brings a year of uncertainty to a close for Wendy's, which announced the formation of a special committee and the possibility of a sale on April 25 last year.[3] The companies said the merger eventually will save $60 million a year by eliminating duplicate corporate functions and streamlining support services. James Pickett, Wendy's chairman and member of a special committee charged with exploring a sale, said the committee wanted to see that shareholders received a premium for their shares. "We believe this transaction with Triarc is in the best interests of all of Wendy's constituencies and represents superior value to what the board anticipates Wendy's would have generated as an independent company," Pickett said in the release.[18] Current Wendy's CEO Kerrii Anderson is not mentioned in the company's announcement. She could not be immediately reached for comment. Triarc also will change its name to incorporate the name Wendy's. The impact on jobs at the Dublin headquarters is not known at this time, but the release put annual savings from the elimination of duplicate corporate functions and streamlined support services at $60 million. James V. Pickett, Wendy's chairman and a member of the special committee charged with exploring a sale, said the committee wanted to see that shareholders received a premium for their shares. "We believe this transaction with Triarc is in the best interests of all of Wendy's constituencies and represents superior value to what the board anticipates Wendy's would have generated as an independent company," he said.[5]

News of the deal Thursday sent Wendy's shares up 4.2%, or $1.07, to $26.39, while shares of Triarc rose 2.7%, or 17 cents, to $6.47 in 4 p.m. composite trading on the New York Stock Exchange. The problems plaguing Wendy's were plain when it announced its first-quarter results on Thursday. The company said its profit totaled $4.1 million, or five cents a share, in the quarter ended March 30, down from $14.7 million, or 15 cents a share, a year ago. [6] 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.[19] The Wendy's board has been studying strategic alternatives since early last year, and expenses related to that contributed to the company's 72 percent drop in first-quarter earnings announced Thursday. Wendy's said its profits totaled $4.1 million, or 5 cents a share, for the quarter ended March 30, compared with $14.7 million, or 15 cents a share, a year ago.[22] Wendy's also reported first quarter earnings fell 72 percent in part because of expenses tied to a board committee's search for alternatives that would boost the company's shares. Wendy's said Thursday that its profits totaled $4.1 million, or 5 cents, a share for the quarter ended March 30 compared with a profit of $14.7 million, or 15 cents a share, a year ago.[23]

Trian Partners owns nearly 10 percent of Wendy's stock. "Over the past 12 months, the special committee of the Wendy's Board conducted a rigorous process that will result in Wendy's shareholders receiving a premium for their shares," said Wendy's chairman James Pickett in a statement. Separately, Wendy's announced that its first-quarter earnings fell 72 percent. It earned $4.1 million, or five cents per share.[24]

Triarc Companies Inc., which owns Arby's and now Wendy's, will pay about $26.78 per share for Wendy's and declined comment on the deal. Wendy's had experienced a 72 per cent drop in earnings in the first quarter of this year.[25] The deal involves a stock swap--4.25 shares of Triarc for each share of Wendy's. It values the struggling fast-food chain at about $26.78 per share, which is a 6 percent premium to yesterday's closing price.[24] The deal involves Triarc's purchase of Wendy's in an all-stock deal worth $2.34 billion that values Wendy's stock at around $26.78 per share.[17]

Among stocks in the news Thursday, Wendy's International ( WEN ) agreed to be acquired by the Triarc Companies ( TRY ), which owns Arby's, in a $2.34 billion all-stock deal.[26] No. 3 hamburger chain Wendy's International WEN on Thursday agreed to be acquired by Arby's franchisor Triarc Companies TRY in an all-stock deal worth about $2.34 billion.[9]

The committee, which resulted in a $2.34 billion all-stock deal to be acquired by Arby's owner Triarc Companies Inc. (NYSE:TRY), cost Wendy's $24.7 million in 2007. Other items affecting first-quarter profit include higher legal fees and reserves, breakfast investments and franchise incentives compared with last year, the company said.[27]

Wendy's signed a merger agreement with Triarc Cos., led by billionaire investor Nelson Peltz, ending an ordeal that began in 2005 when Peltz took a large stake in the company and started pushing for change. Already agreed upon by the boards of directors of both companies, the $2.3 billion deal awaits shareholder approval and is expected to close in the second half of the year. Employees expressed concern about their jobs.[8] The announcement appeared to mark a victory for Nelson Peltz, the billionaire investor who is Triarc's chairman and who has long been agitating for change at Wendy's. The deal, described Thursday as a merger, valued Wendy's stock at $26.78, a 5.7 percent premium to its closing price on Wednesday, Bloomberg News reported. Wendy's has been reviewing its strategic options for about a year, under the watchful eye of Mr. Peltz, whose investment fund, Trian, is Wendy's largest shareholder.[28]

Peltz's Triarc Cos. (nyse: TRY - news - people ) said Thursday it will acquire the Dublin, Ohio-based Wendy's (nyse: WEN - news - people ). Triarc will pay with its own stock in a deal worth about $2.9 billion, including the assumption of long-term debt. Peltz has long craved the ubiquitous chain, making his first offer in July 2007. Even before that, he used a Wendy's stake to push a turnaround. He convinced the company to spin off coffee and doughnut chain Tim Hortons (nyse: THI - news - people ) and got some of his handpicked candidates on Wendy's board.[29] The deal, which is expected to close in the second half of the year, hands the hamburger chain founded by Dave Thomas over to the parent company of the much-smaller Arby's fast-food chain. Its new leaders plan to expand Wendy's international presence, add breakfast at U.S. locations, and create new marketing geared to an older clientele. Triarc replaced Wendy's Chief Executive Kerrii Anderson with its own CEO, Roland Smith.[6] Revenue was down to $513 million from $522 million a year ago. The new company will include Wendy's in its name, but Smith said he was not ready to reveal what it will be. The deal caps two chaotic years for Wendy's, in which it has sold or spun off operations, slashed its corporate staff and had its image tarnished by a woman who falsely claimed she found part of a finger in a bowl of chili. Pushed by activist shareholders, Wendy's spun off its Tim Horton coffee-and-doughnut chain and sold its money-losing Baja Fresh Mexican Grill. Chairman and Chief Executive Jack Schuessler retired in March 2006, months after a woman and her husband were sentenced to prison for extortion for their plot in March 2005 to plant part of a human finger in a bowl of chili at a San Jose, Calif., Wendy's restaurant and claim it was served to the woman.[22]

The new entity will continue to expand in the U.S. and internationally, and is also looking at acquisition opportunities, according to a company statement. It will also explore putting out duel-concept restaurants in high-cost real estate markets. During its first quarter, Wendy's reported a 0.1% same-restaurant sales dip in the U.S. The company posted income from continuing operations of $4.1 million, down from $14.5 million during the same year-ago period. Arby's same-unit sales rose 3% during its most recent quarter, while total sales came in at $320.6 million, down $11.4 million from the same period a year ago.[16]

Triarc, as franchisor of the Arby's restaurant system, would have about 10,000 restaurant units, and pro forma annual system sales of $12.5 billion, when Wendy's and Arby's are combined company. That would make it the nation's third largest fast-food chain. Triarc said it would change its corporate name after the merger to include the "Wendy's" brand.[11] The deal creates the third-largest quick-service restaurant chain in the U.S., with approximately $12.5 billion in annual sales and more than 10,000 restaurants. Triarc will change its name to incorporate the Wendy's brand.[3] Atlanta-based Triarc (NYSE: TRY) is acquiring Dublin-based Wendy's (NYSE: WEN) in an all-stock deal that will create the third-largest quick-service restaurant company in the U.S., with almost $12.5 billion in annual sales.[30]

The country's third-largest burger chain behind McDonald's (NYSE: MCD ) and Burger King (NYSE: BKC ) is hooking up with the parent company of Arby's in a deal that will create a fast-food empire ringing up $12.5 billion in system sales annually. It's clearly not the buyout that Wendy's had hoped for.[31]

Triarc Companies, owned by billionaire investor Nelson Peltz, also owns Arby'''s roast beef chain. Wendy'''s, the nation'''s third-largest burger chain, will be offered 4.25 shares of Triarc for each of its shares. Wendy'''s jumped 1.7 percent in trading this morning. The Wendy'''s board appointed a committee in April 2007 to investigate a possible sale after its sales had slacked in compared to burger giants, McDonald'''s and Burger King.[32] The nearly two-and-a-half-year fight between Wendy's International and Nelson Peltz appears to be over. Facing shareholder pressure and a possible proxy battle, the Wendy's board agreed to merge their company with Mr. Peltz's Triarc Companies, which runs the Arby's restaurant chain.[21] April 24 (Bloomberg) -- Billionaire Nelson Peltz's Triarc Cos. agreed to buy Wendy's International Inc. for about $2.4 billion to combine the third-biggest U.S. hamburger chain with his Arby's roast beef restaurants.[7] After two years of haranguing Wendy's International Inc. management, investor Nelson Peltz finally got his way Thursday as his Triarc Cos. agreed to buy the hamburger chain for $2.34 billion, trumping a competing offer favored by many Wendy's franchisees and employees.[6] DUBLIN, Ohio — Triarc Cos. Inc. says it is buying Wendy's International Inc. in an all-stock deal that comes after the burger chain's board rejected at least two earlier offers by the company controlled by billionaire investor Nelson Peltz.[33] COLUMBUS, Ohio (AP) — The owner of Arby's said Thursday it is buying Wendy's International Inc. in an all-stock deal worth $2.34 billion that comes after the burger chain's board rejected at least two earlier offers by the company.[23]

Billionaire investor Nelson Peltz, owner of Arby's, bought Wendy's International in a $2.3 billion deal that will combine the two chains and, for now, keep the headquarters of Wendy's here, though jobs may be cut.[8] First-quarter profit dropped 32% to $63.2 million, or 28 cents a share, from $93.5 million, or 40 cents, a year earlier, it said Thursday. Billionaire Nelson Peltz has finally succeeded in landing Wendy's in a $2.3-billion deal that would add the chain to his ownership of Arby's and its roast beef sandwiches.[34] Atlanta-based Triarc is owned by billionaire Nelson Peltz, who had made two previous offers to buy the No. 3 burger chain over the last year. According to AP reports, the final deal was much lower than what Peltz said he was originally willing to pay. Last summer he offered $37 to $41 per share, but only ended up paying $26.78 per share for the company, which has about 87 million shares outstanding.[35] In a CNN.Com report, Wendy's confirmed acceptance of Triarc's buyout bid, after two earlier rejections. Triarc owner Nelson Peltz said he will pay $26.78 per company share which stands at about 87 million.[36] Triarc Companies Inc., which is owned by billionaire investor Nelson Peltz, will pay about $26.78 per share for the company, which has about 87 million shares outstanding.[23]

Triarc Companies Inc., which is owned by billionaire investor Nelson Peltz, said Thursday it will pay about $2.34 billion in an all-stock deal for the nation's third-largest hamburger chain started in 1969 by Dave Thomas.[37] Nelson Peltz's new challenge is to turn around 1 of the fast-food industry's more notable names during a slumping economy. His Atlanta-based Triarc Companies said yesterday it will pay about $2.34 billion for Wendy's in an all-stock deal.[38] Triarc Companies Inc. opnbrktTRYclsbrkt, owned by billionaire Nelson Peltz announced yesterday evening it would buy Wendy's International for $2.34 billion.[39]

Wendy's International said Thursday it agreed to sell itself to Triarc Companies, the franchisor of the Arby's restaurant chain, in a stock swap valued at about $2.3 billion.[28] Wendy's International, which opened its first restaurant Downtown in 1969, said yesterday it is being acquired for $2.34 billion in stock by Triarc Cos., which also owns Arby's.[8]

Wendy's International announced Thursday that it signed a $2.3 billion merger agreement with Triarc Cos., franchisers of the Arby's restaurant system. Both Wendy's and Arby's have historic ties to South Florida.[5] MUMBAI (Thomson Financial) - Moody's Investors Service said U.S.-based burger chain Wendy's International Inc.' s ratings remain on review for possible downgrade following the announcement that Triarc Companies Inc., the franchisor of the Arby's restaurant system, and Wendy's have signed a definitive merger agreement for an all-stock transaction.[40] As Wendy's International Inc. unveils an agreement to be acquired by the owner of the Arby's chain, the company told investors costs for the special committee that clinched the deal helped drive its first-quarter profit down 72 percent.[27] The deal brings together two fast-food chains that have been overshadowed by an increasingly competitive industry leader McDonald's. Together Arby's and Wendy's will focus on broadening their offerings during different parts of the day, particularly breakfast, as well as making more acquisitions and expanding globally. Wendy's said yesterday that its first-quarter profit was down 72 percent to $4.1 million, or 5 cents a share, in part because of expenses tied to the work of the special committee.[41] Peltz's hedge fund, Trian, is the largest Wendy's shareholder, with 9.8 percent, and has been agitating for change for some time. Under the deal, Triarc's shareholders will be asked to approve a charter amendment converting each share of Triarc Class B common, Series 1, into one share of its Class A Common Stock, resulting in a post-merger company with a single class of common stock.[11] Wendy's shareholders are to receive 4.25 shares of Triarc class A stock for each share of Wendy's. Atlanta-based Triarc, which operates the Arby's chain, said Thursday its shareholders will have to approve a charter amendment before the deal proceeds.[33] Wendy's deferred comment to Triarc, which said it would discuss the deal later Thursday. Under the terms of the deal, shareholders at Wendy's, the nation's No. 3 hamburger chain, will receive 4.25 shares of Triarc Class A stock for each share of Wendy's stock they own. Atlanta-based Triarc said its shareholders will have to approve a charter amendment in which each share of its Class B stock will be converted into Class A stock. Triarc said it will also change its name to include the Wendy's name.[23] Pam Thomas Farber, daughter of Wendy's founder Dave Thomas, said the family was devastated by the news. She said, "It's a very sad day for Wendy's, and our family. We just didn't think this would be the outcome'. Under the terms of the deal, shareholders at Wendy's will receive 4.25 shares of Triarc Class A stock for each share of Wendy's stock they own.[13] Under the terms of the deal, which is expected to close in the second half of the year, shareholders at Wendy's will receive 4.25 shares of Triarc Class A stock for each share of Wendy's. Triarc said its shareholders will have to approve a charter amendment in which each share of its Class B stock will be converted into Class A stock.[22]

The all-stock transaction between Wendy's and Triarc will give Wendy's shareholders 4.25 shares of Triarc stock for each share of Wendy's stock.[8]

Here is the math behind that assertion: The exchange ratio is based on the 30-day weighted average of Triarc's shares, which is $7.08. That implies a value for Wendy's of $30.09, or an 18% premium to the Wednesday close and a 31% premium to Wendy's stock price 10 trading days ago, before Peltz made last week's offer. Wendy's had board meetings scheduled Tuesday and Wednesday, so when Peltz found out late last week that there was another interested party, he called the company and tried to intervene with a higher bid.[20] Wendy's shares rose 4 percent to $26.39 in trading yesterday. They traded as high as $42.22 last summer, not long after Wendy's announced the formation of a special committee to boost its stock price. The offer is well below the $37 to $41 per share that Peltz said last summer he was ready to offer. Through his hedge fund, Peltz is one of Wendy's biggest investors, and he has agitated for change.[41] In 2006, the part-time Palm Beacher used a proxy fight to secure two seats on the board of H.J. Heinz Co. (NYSE: HNZ) for allies. Last year, through his companies, he muscled a 3 percent share in both Cadbury-Schweppes plc (NYSE: CSG) and Kraft Foods Inc. (NYSE: KFT). When he came courting Wendy's last summer, Peltz brought an offer of $37 to $41 per share.[42]

The board relented at an offer of 4.25 Triarc shares for each share of Wendy's, a $26.78-a-share price that included a 5.7-percent premium, Bloomberg News calculated.[11]

Just last week, the burger chain whined about a pair of buyout offers presented by Triarc as being too low to stomach. Apparently, a closer look at the mirror finds Wendy's realizing that gravity hasn't been kind to her since she put herself on the bidding block last summer. The chain is accepting the all-stock deal as of Thursday morning, giving investors 4.25 shares of Triarc for every share they own.[31] Triarc was one of the most vocal bidders, saying in July it would pay as much as $41 a share for the chain, which would have been $3.6 billion. When capital started to dry up, most of those potential bidders changed their mind, and by Christmas, investors had begun doubting there would be any type of sale. Directors weighed whether to sell just a stake in the company in a deal led by private-equity firm Kelso & Co., this person said.[6]

The deal is worth 2.3 billion dollars, and Wendy's stockholders are to receive 4.25 shares of Triac for each Wendy's share, the companies said. The sales price is based on a value of 26.78 dollars per share, a 6 per cent increase over its closing value a day earlier.[43] Wendy's demurred. One year later, he's getting the company, which still has positive cash flow, for $26.78 per share in an all-stock, no-cash deal.[42] Triarc shares closed at $6.30 apiece Wednesday, giving the deal an initial value of $26.78 a share, above the closing price Wednesday for Wendy's of $25.32.[20] At first glance, the deal price looks skimpy: Based on Wednesday's closing prices, it valued Wendy's at $26.78 a share just a 5.7 percent premium.[21]

The deal is worth $2.34 billion based on the 87.41 million outstanding shares Wendy had as of Feb. 14, 2008, according to Reuters data.[1]

After at least two rejections, billionaire Nelson Peltz has landed Wendy's in a $2.3 billion deal to add the chain known for square burgers and chocolate Frosty desserts to his ownership of Arby's and its roast beef sandwiches.[41] After failing twice, Billionaire Nelson Peltz has successfully in bought out Wendy's. This 2.3 billion dollar deal would add the chain's popular square burger and chocolate Frosty to his ownership of Arby's and its roast beef sandwiches.[44]

CHICAGO (AdAge.com) -- After a year of posturing, insinuating and even brawling, Wendy's has signed a definitive merger agreement with Nelson Peltz' Triarc Cos. in an all-stock deal valued at $2.3 billion.[45] Nelson Peltz'''s firm Triarc Cos has agreed to buy Wendy's International for $2.3bn ('''1.5bn), trumping a competing offer from private equity firm Kelso & Co, favoured by many Wendy's franchisees and employees.[46] Trian Partners, the hedge fund run by Peltz which also controls Triarc, expressed frustration with Wendy's rejection in a letter to the Securities and Exchange Commission. It said Wendy's turned down an offer by Triarc to buy it for $900 million in cash, with an undisclosed amount in stock. It also turned down an offer to merge Wendy's with Arby's.[24] Last week, Triarc announced that Wendy's had rejected two acquisition offers. His Triarc Cos. and Trian Fund Management had proposed combining Wendy's and Arby's, as well as purchasing Wendy's outright for $900 million in cash and stock.[45]

Competition. Last week, after Peltz lobbed an apparently lowball offer of $900 million and unspecified amount of stock, he got wind that Wendy's was close to closing a deal with a rival private-equity firm, according to one person familiar with the company.[20]

Recently, Peltz's Triarc Cos Inc (TRY.N: Quote, Profile, Research ) and Trian Fund Management proposed combining Wendy's and Arby's, a sandwich chain owned by Triarc. They also offered to buy 100 percent of Wendy's, according to a letter included in a recent regulatory filing, but Wendy's Chairman James Pickett said Trian and Triarc failed to reveal how the proposed deals would value Wendy's, which rejected the offers.[47] Within minutes of news Thursday that Peltz's Triarc Cos. (NYSE: TRY) would gobble Wendy's International Inc. (NYSE: WEN) - Wendy's stockholders took to online message boards to weigh in on the burger chain's board of directors, who are willing to accept a 6 percent premium on the stock's value.[42] Wendy's stock closed at $25.32 Wednesday, putting the premium Triarc will pay at just under 6 percent. "We believe this transaction with Triarc is in the best interests of all of Wendy's constituencies and represents superior value to what the board anticipates Wendy's would have generated as an independent company," he said.[3]

The bad news is that Wendy's board of directors folded like the proverbial cheap suit, particularly for shareholders who have been buried since $30 to $40. The other good news is that if you believe in Nelson Peltz & Friends, you are getting this as an all stock exchange and therefore you are getting to participate in the upside if they get this ship turned around.[48] Wendy's stock rose to $37.99 the day after it announced it could be up for sale and hit a 52-week high of $42.22 on May 7, but the price has been on the decline since June and hasn't been above $30 since November 15, closing April 23 at 25.32. James Pickett, Wendy's chairman and a member of the special committee charged with exploring a sale, said the committee wanted to see that shareholders received a premium for their shares.[3] The company reported first quarter earnings from continuing operations of $8.4 million, or 10 cents per share, well below the First Call consensus estimate of 17 cents and year-ago results of $15.1 million and 16 cents, respectively. It was hurt by higher breakfast costs, lower-than-expected sales and rising commodity prices.[10] The Dublin, Ohio-based Wendy's reported net income of $4.14 million or $0.05 per share, significantly lower than $14.69 million or $0.15 per share in the same quarter last year.[17]

Income from continuing operations dipped to $4.1 million, or 5 cents a share, vs. $14.5 million, or 15 cents a share, in the year-ago quarter. Excluding expenses related to the Board's Special Committee and restructuring charges in both 2007 and 2008, Wendy's adjusted income from continuing operations was $8.4 million, or 10 cents a share, vs. $15.1 million, or 16 cents a share.[9] Wendy's said today first-quarter profit dropped 72 percent to $4.14 million, or 5 cents a share, missing analysts' estimates.[7] Wendy's announced yesterday that profit was down 72 percent to $4.1 million for the first quarter and that revenue fell to $513 million from $522 million a year ago.[35] First-quarter revenue fell 1 percent to $582.2 million from $590.2 million. Wendy's had previously reported that first-quarter sales at its U.S franchised restaurants open at least a year fell 0.1 percent, while same-restaurant sales at company-owned eateries fell 1.6 percent during the quarter.[27]

Last year, Wendy's tried a series of ads that featured young men wearing a red wig of braided pigtails that archly recalled the chain's namesake image. They flopped. Mr. Smith also said he will look at expanding the company's snack and beverage offerings. He wouldn't say whether that will include the espresso drinks that McDonald's is adding. In terms of overseas growth, he sees potential in Latin America and Asia. Members of the Thomas family, which tried to block the sale, say they're devastated. "It's just awful," said Pam Farber, one of Mr. Thomas's daughters, who owns 33 Wendy's restaurants in Ohio with her four siblings.[6] '''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.[19] Triarc also owns Arby's. "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 as we execute on the many opportunities we see to expand and improve these two very valuable brands," Mr. Smith said in a statement.[45]

The small premium became even smaller when Triarc's stock opened lower on the news. If you're wondering what Wendy's saw in its own reflection, maybe the company's horrible first-quarter numbers can shed some light on its resignation.[31]

New York - The third largest U.S. fast food chain, Wendy's, is to be taken over by the parent firm of smaller rival Arby's in a multibillion-dollar stock deal, the companies said Thursday.[43] Wendy's and Triarc Companies Inc. (TRY) said that it struck a definitive merger deal whereby Wendy's shareholders will get a fixed ratio of 4.25 Triarc Class A common stock for every Wendy's common stock.[17] In a joint press release, Triarc and Wendy's said that the deal should be completed during the second half of 2008, pending shareholder approval. With Peltz and his partner Peter May owning over 35% of Triarc and their investment company Trian holding 10% of Wendy's, approval appears to be little more than a formality. Now it's Triarc's turn to see if they can turn Wendy's around.[10] Company namesake Wendy Thomas, daughter of founder Dave Thomas, called the outcome a "huge, huge disappointment." Thomas, her three sisters and her mother had been pulling for J. David Karam, a franchisee from Upper Arlington who had joined with two private-equity firms to bid for the company. The deal with Triarc was sealed at the eleventh hour, said Karam, who thought he had an agreement sewed up. He and his partners had received an endorsement from the Wendy's special committee handling the process and were "hours away" from a vote by the board of directors, he said. Peltz then began "lobbing in bids one after another" until he found one that the board liked, Karam said. "It's a sad day for Columbus," Karam said.[8] Atlanta-based Triarc Cos., owned by Peltz, said yesterday that it will pay about $2.34 billion in an all-stock deal for the nation's third-largest hamburger chain, founded in 1969 by Dave Thomas.[41] Triarc Companies Inc., owned by Peltz, said Thursday it will pay about $2.34 billion in an all-stock deal for the chain.[34] After seeking a buyer for the last 12 months, Wendy'''s hamburger chain will sell to Triarc Companies for $2.34 billion.[32]

Dublin, OH (AHN) - Wendy's, America's third largest hamburger chain, has agreed to a total buy out from the operator of Arby's shaved roast beef sandwiches for $2.34 billion.[36]

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.[19] Under that plan, longtime Wendy's franchisee David Karam would have succeeded Ms. Anderson as CEO. For Wendy's restaurant owners and employees who felt bruised by Mr. Peltz's criticism, that option was more palatable than a sale to Triarc. In February, though, Mr. Peltz said he wanted to take control of Wendy's board, putting fresh pressure on directors to lock up a deal.[6]

If shareholders approve the Wendy's sale, one of Peltz's first moves will be to integrate Wendy's with Triarc's other chain.[29] As recently as last week, Peltz and Wendy's were engaged in public bickering about the sale process. Triarc said Wendy's had rejected two of its offers, and Wendy's fired back with its own statement about dissatisfaction with the process.[8] The merger comes after years of pressure by billionaire investor Nelson Peltz, who owns Arby's parent firm, Triac Cos, and who became the largest Wendy's stockholder in order to pressure a sale.[43] NEW YORK (Reuters) - Wendy's International Inc (WEN.N: Quote, Profile, Research ) is set to announce a transaction with billionaire investor Nelson Peltz on Thursday, though the deal's specific details were unclear, the Wall Street Journal reported, citing a person familiar with the situation.[47]

Update: Wendy's stock price fell to $24.41 in morning trading as investors punished the company for the seemingly low premium of the deal.[20]

Nice work if you can get it. For the record, Peltz's investments are generally made through one of his two companies, Triac or Trian Partners, where he is the primary stockholder. Wendy's investors might find this even more unappetizing: Triarc shares have fallen 65 percent in the last 12 months. That's not the picture of health one might want in an acquiring company. Especially an acquiring company that is about to swap its shares for yours.[42] Nelson Peltz, the man behind Triarc, controls nearly 10 percent of Wendy's shares. When Pershing was previously involved with Wendy's, its leader suggested major changes, including the spinoff of Tim Hortons.[49]

Peltz, who controls about 10 percent of Wendy's shares, already had forced change. After he became involved with the company, Wendy's spun off Tim Hortons and sold the Baja Fresh Mexican Grill chain.[8] Peltz and May own Trian shares comprising 35% of the company's voting power and Trian Partners, an investment firm owning 9.8% of Wendy's stock. Both support the merger.[9] Longtime Fool contributor Rick Munarriz actually enjoyed the chunky chicken salad sandwich that had a limited run on the Wendy's menu last year. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.[31]

Shares of Wendy's are now up 4% at $27.50 and Triarc Companies Inc. (NYSE: TRY ) are at $6.66, a nearly 3% gain from yesterday's close.[48] At $6.66 and based on a 4.25 share conversion offer, that would value Wendy's at $28.305 as an end-game pricing. Wall Street is voting positively for Triarc so far, particularly as its shares had been under-performing by so much.[48] The overall deal value of $2.3 billion is much less than last summer's offer from Mr. Peltz, which valued Wendy's at around $3.6 billion to $3.8 billion.[21] The claim turned out to be a hoax, but the damage was done. Peltz, the world's 897th wealthiest person, made a good deal of his $1.3 billion with food and beverage companies. The University of Pennsylvania dropout got his start by building his family's frozen food business into a major distributor. One of his most lucrative achievements was buying Snapple for $300 million and reselling the drink maker for over $1 billion just a few years later. He unsuccessfully tried to buy Burger King (nyse: BKC - news - people ) in 2002 and owns stakes in Cheesecake Factory (nasdaq: CAKE - news - people ) and H.J. Heinz (nyse: HNZ - news - people ).[29] When Mr. Thomas passed away, the chain tried new tactics including the unpopular "Mr. Wendy" campaign. Last year, the chain moved its $435 million advertising account to Publicis Groupe's Saatchi & Saatchi, which gave them the popular but polarizing "red wig" campaign. In January, the chain moved the bulk of its business again, to MDC Partners' Kirshenbaum Bond & Partners. The resulting campaign, "It's waaaay better than fast food," appears to be gaining some traction, although results are very preliminary.[45]

MILLER: The new company will still be the nation's third largest food chain, with over 10,000 restaurants and more than $12 billion in annual sales. The companies say the merger will help both chains lower costs, but analysts aren't convinced. BASHAM: The intention I believe, is for both companies to operate completely independently of each other at least for the time being.[50] The combined companies, which will operate as separate brands, will create the third largest fast food company in the U.S., with about 10,000 restaurants and sales of about $12.5 billion per year.[14]

The company, which runs more than 6,600 restaurants, when merged with Arby's will create the third-largest quick-service restaurant chain in the U.S., with approximately $12.5 billion in annual sales and more than 10,000 restaurants.[27]

Combined, Wendy'''s and Arby'''s will have 10,000 restaurants and sales of about $12.5 billion.[19]

Burger chain Wendy's is to be bought by Triarc, the parent firm of Arby's restaurants for $2.34bn ('1.18bn).[51] The burger chain, which has been on the auction block a while, has not adapted as well as competitors to the country's changing diet. "Life has changed for them because a lot of people are not eating burgers as much as they used to," he said. "When you think of Wendy's, you think burgers, and that is not the image you want when everyone else is showing they have alternatives. Arby's has been able to improve its image, and maybe they hope to help Wendy's." Roland Smith, Triarc's chief executive, said some Wendy's jobs likely will move, but he did not know how many. He also said some jobs would be lost in efforts to eliminate duplication, but that it was too early to give a number. "It is likely that some of the folks at Wendy's will move to Atlanta," said Smith, will also become Wendy's CEO. "It's going to take a fair amount of time to go down and meet the people in Dublin." He said the Atlanta office of Triarc has about 400 employees.[22] The combined company will have about 10,000 restaurants. The Wendy's and Arby's brands will operate autonomously out of their respective headquarters in Dublin, Ohio, and Atlanta, and Mr. Smith said he intends to spend most of his time working in Dublin. He praised Wendy's employees as "high quality" and said he has started meeting with some of the chain's franchisees.[6]

Roland Smith, 53, Triarc's chief executive, will continue in that role for the combined company and also will become CEO of the Wendy's brand. Triarc will change its corporate name post-merger to include the name "Wendy's" and to reflect its new identity as the owner of the chain that sells signature square hamburgers under the logo of a red-headed girl with pigtails.[15] Layoffs will be part of the restructuring, said Roland Smith, who is Triarc's chief executive and will become the new Wendy's chief executive. He would not speculate about where they might take place or how many there might be. "I am entering this with an open mind," said Smith, who plans to move to Dublin. The majority of those employed at both companies work in "brand execution," such as marketing and product development, and will remain with each brand, he said.[8]

The company will look at consumers' reaction to the products, how the products fit with the Wendy's brand, and whether the products are as profitable as possible, Smith said. Triarc has its work cut out for it, if Wendy's first-quarter earnings are any indication.[8] Arby's and Wendy's will operate as autonomous brand business units. Bloomberg said that Wendy's CEO Kerrii Anderson, its former CFO, had failed to keep up with new-product introductions by competitors, leading to the pressure for a merger. According to a report in Portfolio.com, Triarc CEO Roland Smith will replace her at Wendy's while also remaining CEO of the combined company.[11]

Boston (eCanadaNow) - Triarc Companies Inc., the company who franchises the Arby's restaurants, has merged with Wendy's International Inc.[4] Wendy's International (NYSE: WEN) had more than 6,600 Wendy's restaurants in the United States, Canada and other markets. Triarc (NYSE: TRY) franchises about 3,700 Arby's restaurants, 1,106 of which were owned and operated by its subsidiaries as of Dec. 30.[18]

PAUL KANGAS: In other corporate news today, hamburger giant Wendy's International is being swallowed by Arby's parent Triarc.[50]

Atlanta-based Triarc Cos. Inc., which moved from New York more than a year ago when it bought roast beef king Arby's, is adding burger giant Wendy's to its portfolio.[22]

Triarc says Arbys managers will improve operations at Wendys, eventually generating $100 million in profit annually.[14] CNN added that Wendy's profits totaled $4.1 million in the fourth quarter of fiscal year 2007.[36] Today, Wendy's said profits fell to $0.10 a share from $0.16 a year ago and $0.07 shy of estimates. Branding expert Andrea Sullivan says Wendy's has had trouble finding its niche. ANDREA SULLIVAN, EXECUTIVE DIRECTOR, CLIENT SERVICES, INTERBRANDS: It's interesting, if you look at the Wendy's brand, I think it's appealed to more of a nostalgic feeling.[50] The Dublin-based fast-food chain on Thursday said it recorded first-quarter profit of $4.14 million, or 5 cents a share, down from $14.7 million, or 15 cents a share, a year ago.[27]

On Thursday, Wendy's said first-quarter earnings fell by 72% to $4.14 million, or 5 cents a share, from $14.7 million, or 15 cents a share in the year-ago period.[52] Shares of Wendy's are currently trading at $25.50, up 18 cents or 0.71% on a volume of 3.6 million shares.[17]

Wendy'''s shares rose by 24 cents to $25.32, while shares of Triarc fell by 11 cents to $6.30.[32] Triarc shares closed down 1.7% to $6.30, a 5.7% premium to Wendy's closing price of $25.32 Wednesday.[9] Based on Triarc's closing share price Wednesday of 6.30 dollars, Wendy's shareholders will receive a modest six percent premium.[15] Wendy's shareholders seem displeased with the deal. In premarket trading, its shares dropped nearly 4 percent.[24]

Wendy's management took steps to please shareholders. They accelerated its share buyback program, paid down debt, spun off its Tim Horton's chain and launched new marketing efforts for its Super Value Menu.[21]

Wendy's shares were up 1.94 percent at 25.811 dollars and Triarc gained 0.79 percent at 6.35 in New York trade around 1830 GMT.[15] Wendys shares rose 42 cents, or 1.66 percent to $25.74. This article is copyrighted by International Business Times.[14] Wendy's shares were falling 3.2% to $24.50, while Triarc shares were down 1% to $6.24 in recent premarket trading.[9] Wendy's (NYSE:WEN) shares closed at $26.39 Thursday, up from Wednesday's close of $25.32, while Triarc (NYSE:TRY) shares closed at $6.47, up from $6.30 the day before.[3]

Triarc will pay about $26.78 per share for the company, which has about 87 million shares outstanding.[41] Income from continuing operations also dropped to $4.1 million or $0.05 per share from $14.5 million or $0.15 per share in the prior year quarter.[17] Adjusted income from continuing operations were $8.4 million or $0.10 per share, lower than $15.1 million or $0.16 per share in the corresponding period last year.[17]

Wendy's also posted earnings of 10 cents per share, down from 16 cents a year ago.[26] Apple ( AAPL ) shares rose 3.71% after the maker of iPods and Mac computers posted earnings of $1.16 per share, vs. 87 cents a year ago, as revenue rose 43%.[26] Ford Motor ( F ) unexpectedly posted a narrow profit Thursday, reporting earnings of 5 cents per share, vs. a 15-cent loss a year ago.[26]

On average, 10 analysts polled by First Call/Thomson Financial predicted the company to report earnings of $0.17 per share.[17]

Last summer, Mr. Peltz's companies indicated willingness to pay $37 to $41 per share, but lowered the price last fall.[45]

If Pershing bought the 13.1 million shares in March ''' when Wendy's shares were usually below $24 ''' the fund probably believes that Wendy's is worth more, Paul said.[49] Wendy's cost of sales were $319.8 million or 62.3% of retail sales versus $324.1 million or 62.0% of retail sales as a fall out of decline in sales, breakfast sales at lower margins and higher commodity costs, offset partly by labor efficiency and menu price hikes.[17] Company restaurant operating costs accounted for $151.2 million or 29.5% of sales versus $152.4 million or 29.1% of sales in the previous year quarter on lower sales.[17] Wendy's disclosed that there were several unusual items impacting the comparability as a result of increased breakfast investments of $4.2 million and legal fees and reserves of $1.6 million besides $1.3 million franchisee incentives. These apart, $0.6 million were recorded as convention costs. For these expenses, EBITDA from continuing operations was almost flat with prior year quarter.[17]

The news came after Wendy's saw a 72% fall in first quarter profits to $4.14m from $14.7m a year earlier.[51] Wendy's (NYSE:WEN) closed 2007 with profit of $87.9 million on revenue of $2.45 billion.[27]

After two past rejections, the owner of Arby's shaved roast beef sandwich restaurants is buying Wendy's, the fast-food chain famous for its made-to-order square hamburgers and chocolate Frosty dessert, for around $2 billion.[37] Margins on earnings before interest, taxes, depreciation and amortization need improvement, Smith said, noting that Wendy's franchisees are outperforming company stores in that measure. He said an Arby's strength is the restaurants' efficient operations. "We need to be able to operate restaurants from both a customer service and a bottom line profit perspective," he said.[30] Wendy's CEO Kerrii Anderson will leave the business after a transition period. Smith said the Wendy's executive team is a capable group that he looks forward to working with, but he would not discuss any potential executive changes. He will relocate to Central Ohio, where he will run both Arby's and Wendy's. Triarc plans to open a centralized support center in Atlanta to handle public company responsibilities and other central service functions, which likely means changes are coming for departments such as legal, accounting, information technology and other non-brand-related areas that overlap with Arby's functions.[30] The companies will continue to operate separately, with Arby's in Atlanta and Wendy's in Dublin, but Triarc said it will create a consolidated support center in Atlanta to "oversee all public company responsibilities and other central service functions."[3] Wendy's declined to comment on the announcement beyond the news release it issued. "We believe this transaction with Triarc is in the best interest of all of Wendy's constituencies and represents superior value to what the board anticipates Wendy's would have generated as an independent company," James V. Pickett, Wendy's chairman, said in the statement.[8] Over the last 12 months, Wendy's has existed in a state of suspended animation as the Special Committee of Wendy's Board, formed to look into how to best right the struggling company, sought out alternatives. It decided to sell the company to Triarc. "We believe this transaction with Triarc is in the best interests of all of Wendy's constituencies and represents superior value to what the Board anticipates Wendy's would have generated as an independent company," Wendy's Chairman James Pickett said in a press release.[10]

The new board of directors will be expanded to 12 members, including two nominated by Wendy's board, Triarc Chairman Nelson Peltz and Vice Chairman Peter May. [9] Wendy's board had earlier rejected two former offers from Triarc, which is owned by billionaire Nelson Peltz.[51] Since last summer, Wendy's has rejected several buyout offers from Triarc's chairman, billionaire investor Nelson Peltz.[50]

"We know we must do better and we are focused on driving sales and performance in future quarters.'' In February, Peltz threatened Wendy's with a proxy fight, saying he planned to nominate six candidates to Wendy's board. Last week he said Wendy's rejected an acquisition proposal and a separate offer to merge Wendy's with Arby's.[7] Make no mistake: Even after Thursday's deal with Mr. Peltz, the future of Wendy's is far from certain. Arby's has not exactly become a major fast-food powerhouse since he took control of it in 1993. Any change may be welcome at this point. One major shareholder, expressing his disdain for Wendy's current management, said Thursday "it is impossible to conceive of a scenario that could be worse."[21] Peltz and Wendy's worked through the Passover holidaywhich was "not cool with some people," according to the person familiar with the deal. Getting this deal done after a year of agita may not have led to a sweet Passover, as the greeting goes, but some expect it will lead to a more savory future for the company.[20] Nelson Peltz's yearlong fight for Wendy's has finally resulted in a deal, and according to the company's calculations, Peltz paid highly.[20] Wendy's isn't the most financially appetizing company right now, but don't question Nelson Peltz's taste.[29]

After a lengthy pursuit, Nelson Peltz buys Wendy'''s International Inc, the third largest U.S. hamburger chain, in an all-stock takeover.[19]

The sale of Wendy's International Inc. to the Atlanta-based parent of the Arby's fast-food chain will mean changes in the short term, but the CEO-to-be is predicting the Arby's team will bring long-term improvements to the business.[30] Many people with a stake in Wendy's International weren't happy yesterday after the Dublin burger chain said it has agreed to be acquired by the parent of Arby's.[8] An investment firm that bought and then sold a stake in Wendy's International has re-emerged as an investor in the burger chain.[49]

Mr. Peltz has made a business out of streamlining bloated, underperforming food companies, UBS analyst David Palmer noted in a report. The investor acquired his Wendy's stake in 2005, and quickly pressed the chain to sell off ancillary businesses Tim Hortons and Baja Fresh, at a steep loss.[45] Peltz's Trian Fund Management is Wendy's largest shareholder with a 9.8 percent stake. In the past two years he pursued and won board seats at ketchup maker HJ Heinz Co. and Kraft Foods Inc. and helped force Cadbury Schweppes Plc to spinoff its soda unit. In December, he acquired more than 10 percent of Cheesecake Factory Inc.[7] What's more, Wendy's directors may have had few options. A major shareholder in Wendy's told DealBook on Thursday that by February of this year, Mr. Peltz had rounded up enough support to win control of Wendy's board in a proxy fight.[21]

Its no surprise that the Wendy's board was asleep again at the helm. They allowed the former CEO to rob the bank with his compensation and stock awards, can say hit the lotto Jack Schussler. All this took place as shareholder value plummeted.[20] As Erika Miller report, the $2.4 billion all stock takeover completes Wendy's year-long search for a buyer.[50]

Now, Pershing could attempt to extract that value by trying to drive up the bid for Wendy's, Paul said. He called the $2.3 billion price tag for the Wendy's merger '''pessimistic''' given the strength of the burger category and the Wendy's brand.[49] The person familiar with the company says today's deal is actually a premium of around 18% to Wednesday's closing price and that deal generously values Wendy's at 9.8 times expected 2008 earnings before interest, taxes, depreciation and amortization, or Ebitda.[20] "The deal values Wendy's at roughly 8- to 8.5-times adjusted 2007 EBITDA (earnings before interest, taxes, depreciation and amortization)," according to a Peltz spokesman.[12]

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: The deal between Wendy's and Arby's parent Triarc ends a long and very public food fight.[50] Wendy's has 6,622 restaurants, while Arby's has about 3,700 outlets. Smith said Triarc looks forward to building on Wendy's "proud heritage" and quality brand, but he sees several areas identified for improvement.[30] RTM makes up 70 percent of the 1,106 Arby's locations operated by Triarc. By acquiring its largest franchisee and adopting many of its practices, Smith said they have more of a franchisee mentality toward store operations. "We'd love to believe we can bring that owner-operator mentality to the Wendy's brand," he said.[30]

Triarc would change its corporate name to include "Wendy's," but Arby's and Wendy's would operate as autonomous brand business units headquartered in Atlanta and Dublin, Ohio, respectively, both companies said.[1] Although Wendy's headquarters will remain in Dublin, where as many as 600 people work, and Arby's will stay in Atlanta, Triarc will open a center in Atlanta for handling services duplicated between the companies.[8]

Wendy's International Inc (WEN) and Triarc Companies Inc (TRY) announced a definitive merger agreement on Thursday.[17] Dublin, Ohio-based Wendy's International Inc. has agreed to be bought by the parent of the Arby's fast-food chain.[3] Wendy's that opened 2 years ago here has been doing badly after the grand opening. Arby's has been picking up since a new chain office supply store moved by them.[28] Wendy's and fellow fast-food chain Arby's will remain as separate brands. Wendy's has been hit by tough competition from McDonald's, which has widened its menu and Burger King, which has offered a cheaper breakfast menu.[51] Without Thomas, Wendy's ad campaigns have been lackluster at best, especially compared to McDonald's and Burger King's ( BKC ) contemporaneous ads. Another campaign fizzled in January when Wendy's replaced "That's Right," which had failed to boost sales, with "Waaaay Better Than Fast Food." "The company almost had to decide what they wanted to be from scratch," said UBS analyst David Palmer. "They seem to be switching from campaign to campaign."[10] Following the death of founder Thomas in January 2002, revenue at Wendy's has waned, with sales at older stores dropping six quarters in a row before Jack Schuessler resigned as chief executive officer in April 2006. JPMorgan Chase & Co. and Greenhill & Co. advised Wendy's, on the takeover by Triarc, while Akin Gump Strauss Hauer & Feld LLP and Winston and Strawn were its legal advisers.[7] Shareholders might also note that Wendy's was staring down the barrel of some grim financial results. Thursday's merger announcement largely overshadowed a generally dismal quarterly earnings update from Wendy's, in which the company's chief executive, Kerrii Anderson, sounded as if she were apologizing to shareholders. In a statement accompanying the results, she said: "We know we must do better and we are focused on driving sales and performance in future quarters."[21]

Triarc Chief Executive Officer Roland Smith, 53, will be CEO of the combined company as well as of the Wendy's brand.[7] Roland Smith, Triarc's CEO, will continue in that role for the combined company and will also become Chief Executive Officer of the Wendy's brand.[17]

Triarc's chief executive officer Roland Smith, who will take over that role for Wendy's as well, said the new firm would focus on global growth and offer more breakfast items. "We also expect to drive significant synergies and improve efficiency, resulting in substantial annual savings for our combined organization," he said.[51] Triarc's concerns were real. Another person familiar with the bidding said Kelso and Mr. Karam believed they had clinched a deal as the week began, but by Wednesday, Wendy's directors had chosen Triarc's offer instead.[6] Concerned that Wendy's directors would agree to a deal with Kelso, Triarc cobbled together what later proved to be the winning offer over the weekend, according to another person familiar with the situation.[6]

Wendy's, based in Dublin, Ohio, had rejected at least two buyout offers from Triarc.[41] The announcement comes after Wendy's rejected at least two earlier offers by Triarc.[13]

The all-stock transaction is valued at $2.3 billion. Triarc also will change its name to include the Wendy's name.[53] Triarc says it expects to make changes to eventually save $160 million a year. Triarc also operates 3,700 Arby's restaurants and says expansions for both brands are planned for the U.S. and overseas.[38] The merger would make Triarc a $12.5 billion company with 10,000 restaurants, the third largest in the quick-service category behind McDonald's and Yum Brands.[45]

The company, owned by billionaire Nelsen Peltz, is buying the chain for about $2.34 billion in stock. It will create the third-largest fast-food chain in the country.[22] Today's action -- the stock is up over $27.50, a 4% gain -- is looking like a story of " Good News, Bad News, Good News" for investors. This was a huge score for Mr. Peltz and Triarc.[48] Wendy's gained $1.07 to $26.39 at 4:01 p.m. in New York Stock Exchange composite trading.[7] Triarc, based in Atlanta, is less than one-third the size of Wendy's on the New York Stock Exchange.[7]

COLUMBUS, Ohio (AP) - The billionaire investor whose company is purchasing Ohio-based Wendy's is known for pushing corporations to make changes to boost their stock price. [38] For a relatively young chain with a number of original Wendy's franchisees and investors still intimately connected with the business, an all-new Peltz way of doing things could prove hard to swallow. "It's good news that we're finally getting past what we were going through with the uncertainty," said one franchisee. "I'm not comfortable that this is where we wanted to end up, and I think a lot of it is we're essentially dealing with a lot of people who are unknown to us."[45] Wendy's put itself up for sale last June, under pressure from Peltz, who controls nearly 10 percent of Wendy's and has clamored for better financial results at the chain.[12]

The deal would create the third-largest fast-food restaurant chain in the U.S., with about $12.5 billion in annual sales and more than 10,000 units.[5] The combination, which had been discussed for months, would create a combined chain featuring 10,000 restaurants that generated $12.4 billion in pro forma sales last year, the companies said in a press release.[9] The merger would create the third-largest fast-food restaurant chain in the United States, with about $12.5 billion in annual sales and more than 10,000 units, the companies said in a release Thursday.[18]

The combined company will have approximately 10,000 restaurant units and pro forma annual system sales of approximately $12.5 billion. This would make the company the nation's third largest quick service restaurant company.[17] While sales revenues slipped 1.9% to $513.02 million from $522.94 million, franchise revenues rose 2.9% to $69.17 million from $67.22 million in the comparable 2007 period. The company added that its U.S. same store sales at the franchise-operated restaurants slackened 0.1%, whereas company-operated restaurants' same store sales slipped 1.6%.[17]

The combined company would have about 10,000 restaurant units and annual sales of 12.5 billion dollars, positioning it behind sector leaders McDonald's and Burger King. The new company expects to particularly focus on breakfast and global expansion for both brands, and growth through future acquisitions and new unit development, the statement said.[15] Wendy's and Arby's will continue to function as two separate business units, with headquarters in Dublin, Ohio, and Atlanta, respectively. According to a joint statement, the new company will pursue daypart expansion focused on breakfast, global expansion for both brands, growth through future acquisitions and new unit development.[45]

Wendy's, which was founded and based in Ohio, has been acquired by the parent company of Arby's.[2]

After the merger, the two companies will consolidate some functions to save money. Mr. Smith said it's possible they will co-brand stores -- putting a Wendy's and an Arby's in one location -- as part of the chain's overseas expansions.[6] Wendy's local headquarters here will remain, as will the Triarc's current main office in Atlanta. Roland Smith, Triarc's CEO, will retain his title and take on the same role for the Wendy's chain.[16] Wendy's employs 550 regionally. Triarc CEO Roland Smith, 53, will retain that role and add Wendy's CEO to his titles.[3]

Peltz later joined the push. '''That could be a spoiler,''' said Ron Paul, president of Technomic, a Chicago restaurant- and food-research firm. He said he thinks the merger, which requires the approval of Wendy's and Triarc shareholders, still is likely to be completed. He said, it might not be a '''slam-dunk.'''[49] Peltz, who is a major shareholder in Wendy's, has been pushing for better financial performance at the company.[47] Peltz is a major shareholder of Wendy's and has been turning up the heat on the chain.[50] The rival firm, Kelso Co., was working with a Wendy's franchisee. Though Kelso had been in the picture for a while, talks between Kelso and Wendy's intensified after Peltz announced he would try to call a special meeting of Wendy's shareholders, this person said.[20]

Needless to say we spent hundreds of millions of shareholder dollars with no resolution. How can the wendys board show their face in public? They slipped out in the middle of the night with their 55 million dollars compensation award.[20]

Wendy's general and administrative costs increased to $53.2 million or 9.1% of revenue from $50.8 million or 8.6% of revenues due to increased professional and legal fees, salaries and convention costs.[17] Wendy's may save $60 million by cutting duplicate corporate functions.[7]

Wendy's stock benefited from the Pershing filing, closing up 7.3percent yesterday, or $1.92, at $28.31.[49] Pershing, led by William Ackman, became involved with Wendy's in 2005, when it acquired stock and options. Its stake eventually reached more than 10 percent, but by late 2006 it had sold most of its shares.[49] The deal news pushed Wendy's shares up 4.2% to 26.39, while Triac shares rose 2.7% to 6.47 on Apr. 24.[10] The offer represented a mere 6% premium to Wendy's shares, and a sharp discount to last year's highs.[31] Wendy's could use even more guidance. Its shares are down by 21.4% over the past year.[29]

Our Wendy's was pretty good up until 5-6 years ago. It now is near the bottom of the fast food outlets with perhaps the exception of Popeyes. If our local Wendy's starts to carry the Arby's product line and improves their service, I may start going back.[28] Profit margins, which have been falling, also need to be brought up to the levels of other fast food restaurants. "Wendy's may have lost its way a little bit since Dave Thomas died," said Morningstar analyst John Owens.[10] Wendy's founder Dave Thomas in front of the original East Broad Street restaurant in 1989.[8] The family of Wendy's founder Dave Thomas has expressed disappointment with the Triarc merger.[49] Since the 2002 passing of founder Dave Thomas, Wendy's has struggled to keep up with competitors in sales and menu innovation. "They really have gone from being an innovator and leader, being able to use Dave Thomas as a marketer, to being a follower," said Darren Tristano, exec VP of Technomic. "Now they're adding breakfast, adding coffee, and a wrap. They've been trying to keep up versus leading the way, and if this is the kind of kick in the pants to become the innovator that we've known them for in the past, then I'd like to see that happen."[45] Pam Thomas Farber, 53, daughter of Wendy's founder Dave Thomas, said the family was devastated by the news. "It's a very sad day for Wendy's, and our family. We just didn't think this would be the outcome," she said. If her father were alive to hear news of the buyout, "he would not be amused," Farber said.[23] The family had supported an alternate bid led by Wendy's franchisee David Karam, president of Cedar Enterprises Inc. "It's a very sad day for Wendy's, and our family. We just didn't think this would be the outcome," Farber said. Dave Thomas founded Wendy's in 1969 and became the face of the company when he began pitching his burgers and fries in television commercials in 1989. He died in 2002.[22] Wendy's founder Dave Thomas, well known in the company's ads, was a longtime Fort Lauderdale resident. He died at his home there in 2002.[5] Wendy's, whose founder Dave Thomas died in 2002, agreed to be acquired a year ago.[15] Wendy's founder Dave Thomas celebrates the chain's 25th anniversary in 1994.[8] Wendy's, the nation's third-largest hamburger chain, was started in 1969 by Dave Thomas.[44]

The brand itself has been really anchored to Dave Thomas. Since his passing, I think it has been an opportunity to look at how should Wendy's really revitalize its image overall.[50] After the death of founder Dave Thomas in 2002, Wendy's tried repeatedly to find an ad campaign that could replace Thomas' popular TV work.[8] After Wendy's founder Dave Thomas died in 2002, Wendy's has suffered from an identity crisis.[10]

Longtime restaurant operators in the chain complained that Wendy's was getting away from the path cleared by Thomas. [8] Thomas became the public face of Wendy's, playing the role of a self-effacing boss plugging the chain's hamburgers, French fries and milk shakes. "Our strategy isn't to make me a hero, it's to tell people about our quality food, good service and clean restaurants,'' Thomas said in a 1996 Bloomberg interview.[7]

The market may not have much of a choice beyond warming up to the marriage of Wendy's with Arby's. The way things seemed to be going for the burger chain, it's a better future than living alone.[31] The burger chain agreed to be bought by Peltz's company , which also owns Arby's.[24] The No. 3 burger chain, which has been on the block for months, finally found a home at Triarc -- which also owns Arby's.[54]

Yesterday's disclosure of Pershing Square Capital Management's purchase of a 15 percent stake raised eyebrows because of the timing of the news: A day earlier, Wendy's agreed to be sold to Triarc Cos., parent of Arby's. [49] Triarc's Arby's currently operates about 3,700 units, while Wendy's has 6,600 locations.[16]

Restoring the luster to Wendy's brand should be first and foremost for Peltz and Triarc, UBS' Palmer said[10] Wendy's has been seeking "strategic alternatives" for a year, and Triarc is the only one that has been vocal about winning Wendy's hand.[31] Triarc said synergies from combining certain parts of the two chains will save up to $60 million a year.[29] The quarter included $200,000 in pre-tax restructuring charges and $6.7 million in costs associated with the special committee formed a year ago to explore strategic alternatives for the chain.[27] Crude oil for June delivery fell $2.24, or 1.9%, to settle at $116.06 Thursday on the New York Mercantile Exchange. Hershey Co. said profit fell for the sixth consecutive quarter after its second price increase in a year failed to overcome higher costs for ingredients.[34]

Separately, Wendy's posted sliding first-quarter profits as the chain focuses on a restructuring and rollout of new products.[9] Being purchased by a chain that has notoriously poor service, inferior products and questionable operational performance does not bode well for Wendy's. Arby's is a second tier player in the QSR world and the inevitable consequence will be that they will drag Wendy's down to their level.[28]

Wendy's is so vastly superior to Arby's I cannot see how the sale will result in anything but cheaper food and worse service.[28] Diners enjoy the food at the original Wendy's, 257 E. Broad St., on March 1, 2007, the day before it was closed forever because of lagging sales.[53]

Wendy's can use the help. The chain has been struggling with both sales and brand image of late.[54] The average estimate of nine analysts surveyed by Bloomberg was for 17 cents. Wendy's reported earlier this month that sales at company- owned and franchises outlets dropped for the second quarter in a row.[7] Standard & Poor's analyst Mark Basham says Wendy's finally surrendered after a series of failed efforts to boost sales. MARK BASHAM, EQUITY ANALYST, STANDARD & POOR'S: They've changed their advertising a couple of times. They've tried to switch up the menu, to get, first to get higher premium products on the menu. When that didn't work, they tried a value approach to drive traffic. That really hasn't worked in my opinion.[50] After several years of meandering, McDonald's has been on fire in recent years, launching successful products (some of which copied Wendy's) and reasserting itself in the market. Even No. 2 Burger King, a former weak fast-food player, has gained momentum with its giant burgers, value breakfast menu and its plastic king mascot.[8] Kerrii Anderson, Wendy's CEO since 2006, failed to keep up with new product introductions from McDonald's, which added snack wraps and premium coffee, and Burger King, which offered a discount breakfast menu.[7]

If I'm utterly famished, I'll settle for a Wendy's single before a McD's Filet-o-Fish or a burger king sandwich. The companies are all so focused on getting customers through the line and out the door that they are peddling lukewarm mush.[28] I would eat the hugest Arby's roast beef sandwich soaked in that secret sauce at least twice a week if I could. As for Wendy's. they are ok. It is tough to compete with the Burger King Triple Whopper with Cheese and Bacon. That is a fat-fest that establishes a very tough benchmark.[28]

Franchisees also are anxious, said Roger Webb, owner of Wenco Group, which owns 38 Wendy's restaurants in Florida and Alabama. "It's difficult to understand how the personality of Wendy's merging with Arby's would be good for Wendy's," Webb said.[8] In the NW Arby's is very poor, the restaurants are always dirty they have a hard time keeping people who know customer service employed. Wendy's is truly a step above Arby's, this cannot be good for Wendy's business.[28]

Let us hope that Trian doesn't screw too much with the Wendy's menue. Their chili is better than most chili restaurants and their $pricing brings in customers who order more than a single item.[20] "I can see how Wendy's is more valuable in the hands of Triarc," Morningstar restaurant analyst John Owens said.[12] Triarc's board of directors will be reconstituted with 12 members, including two directors nominated by Wendy's.[1]

Triarc Class A stock rose 17 cents to $6.47. "The goal is to improve the company store margins from where they are today to the level generally that their franchises are delivering on a regular basis,'' Smith said in a telephone interview.[7] Triarc shares rose 5 cents, or 0.79 percent to $6.35 in afternoon trading.[14] Triarc shares are trading down by 12 cents or 1.9% at $6.18 on a volume of 837 thousand shares.[17]

Back out restructuring and suitor-sniffing expenses, and profits still would have clocked in lower at $0.10 a share. [31] Analysts had forecast a profit of 17 cents on revenue of $573.7 million, according to Thomson Financial.[9] Revenue fell 1.4 percent to $582.2 million, the fourth consecutive quarter of lower or little-changed sales.[7] Total revenues slackened 1.4% to $582.19 million from $590.16 million in the previous year quarter.[17] Revenue was down slightly to $513 million from $522 million a year ago. Associated Press writer Doug Whiteman contributed to this story.[23] Total revenue dipped to $513 million from $522 million logged last year.[36]

The combination of the two chains may produce $100 million in additional operating earnings over time from reduced food, labor and operating expenses.[7] The company was set to report earnings Friday, but figured it would push it through today on the heels of the buyout announcement. It was definitely not a quarter to remember for Wendy's.[31] I don't see any of that. MILLER: Wendy's big drop in first quarter earnings is evidence of its problems.[50]

Wendy's U.S. margins before interest, taxes, depreciation and amortization were 8.1 percent in the first quarter.[7]

Get the inside scoop on the Berkshire Hathaway Annual Meeting. If you want a meatier stock than Wendy's, there is one fast-growing quick-service chain that has nearly doubled since it was recommended in both Rule Breakers and Motley Fool Hidden Gems.[31] The stock of Wendy's International Inc. (NYSE: WEN ) was looking pretty poor yesterday morning.[48] Wendy's International Inc. is America's No. 3 hamburger chain, and formerly owned the Tim Hortons doughnut-shop operation in Canada.[33]

I wouldn't put Wendy's on the top of the fastfood chain, personally I think Carl's Jr. has better burgers - but Wendy's was a great alternative.[28] Thomas' daughter Pam Thomas Farber said the family was devastated by the news. "It's a very sad day for Wendy's, and our family. We just didn't think this would be the outcome," said Farber, 53. If her father were alive to hear news of the buyout, "he would not be amused," she said. Thomas became a household face when he began pitching his burgers and fries in television commercials in 1989.[37] Wendy's was unsuccessful when it came to connecting with consumers in several ad campaigns since Thomas' death in 2002. They had only limited success by adding new products to its breakfast menu.[44] Thomas' daughter said the family was distraught by the news saying it was "a very sad day for Wendy's, and our family."[44]

Wendy's has been struggling for several years. It has failed to keep up with trends in the industry, such as boosting growth by focusing on breakfast and value menus. Last summer, while McDonald's ( MCD ) focused on making its franchises a convenient stop on the morning commute with its new and improved coffee, Wendy's served breakfast at only 500 of its 6,000-plus franchises.[10] Even though I haven't been to Wendy's in probably five years, I will now make sure that I never consider it for myself or anyone I care about for the foreseeable future. There are very limited ways to cut costs from these outlets at this point other than to change the basic ingredients and/or the entire value proposition.[28]

After more than two years pressuring to sell itself, the billionaire investor can finally claim victory.[24] The original Wendy's building, for years a working restaurant and museum, has been sold, shuttered and trashed.[28] Wendy's had been seeking a buyer for a year, and as recently as last week it had turned down several offers.[24] The Wendy's board had turned down at least two prior offers, according to the Associated Press.[11]

Wendy's board put itself up for sale in April 2007 and by July, bankers had received a couple of dozen indications of interest from potential bidders, according to a person familiar with the situation.[6] The Wendy's board has been studying strategic alternatives since early last year.[33] The new board will have 12 members, including two directors nominated by Wendys.[14] Wendy's employees received the news yesterday morning in a meeting in the lobby of the company headquarters. They were told there will be changes, including possible layoffs, but that details will not be available for several months.[8] Smith will assume leadership of the combined company and will take over as CEO of the Wendy's brand.[9] Mr. Smith, a 53-year-old West Point graduate whose first job was cleaning bathrooms at a McDonald's, says a top priority will be fixing Wendy's advertising campaign. "Few brands are able to be everything to everyone all the time," he said.[6]

"I think all of us felt that if (Peltz) took it over, the whole thing could end up moving," said a longtime Wendy's employee who did not want to be identified. "I think everyone's concerned -- they have the same jobs down there in Atlanta. It's sad for everyone.[8]

Peltz's influence has been felt at Wendy's for awhile now. Their Frescata sandwiches were the only fast food option commonly available that was remotely healthful. When they yanked that product in December, I ceased being a customer.[28] Why would anyone consider changing anything at Wendy's? It's head and shoulders better than any other fast food place out there, on every level.[28]

Wendy's also has good food and typically nice stores, although not as nice as Arby's in my region (Northwest). I actually think this merger is reasonably complimentary.[28] While I agree with the idea that eating most of the food offered too much is a horrible way to treat your body, I'm not about to go preaching to people to stop eating Arby's or Wendy's. This is freaking America.[28]

Here in Maryland I have a Wendy's a half mile down the road, or I can go 8-10 miles north or south to get to an Arby's. I would much prefer driving to the Arby's even with gas prices as they are.[28]

Arby's Buys Wendy's for 2.34 Billion; Tria. Type in your e-mail address below to receive an automated reminder to come back and read this piece of content.[55] The companies will continue to operate as separate business units, with Arby's in Atlanta and Wendy's in Dublin, Ohio.[18] The structure of the combined companies will include Arbys and Wendys centers in Atlanta, Georgia, and Dublin, Ohio, respectively, focusing on operational improvements.[14]

Arby's and Wendy's will operate as autonomous brand business units headquartered in Atlanta, Georgia, and Dublin, Ohio, respectively.[15] Forgetting all the trivia about Wendy's and Arby's is anyone else dissatisfied with what Murdoch has done and is doing to the Wall Street Journal? I am seriously considering non-renewal of my subscription when it expires.[28] Wendys was special and Arbys was down market. It won't be Dave's way any more.[28]

Kerrii Anderson, Wendy's current chief executive, will remain with the company through the transition but will leave after that, Smith said.[8] "We need to try to recapture the premier status that Wendy's owned for years and years," Smith said.[8] The Wendy's in my area (Fair Oaks, CA) closed overnight about a year ago. The building still stands, vacant and stripped of it's signage, looking like an eyesore. I wish they would bring it back.[28]

I don't mean it had holes like a White Castle burger that are put there on purpose, I mean it was so thin that it literally did not exist in some places. Here's hoping Wendy's does not sink to the level of its new owners.[28]

The deal comes as the nation's third-largest hamburger chain struggles with declining profits and weak sales compared with rivals McDonald's and Burger King.[38] MILLER: Larger rivals McDonalds and Burger King also have the advantage of more efficient distribution systems which can help offset rising commodities prices. Those two chains have benefited from strong overseas sales and the weak dollar.[50]

The purchase would put the two fast-food chains under the same umbrella and could help the No. 3 hamburger restaurant lower costs as it struggles to regain market share lost to rivals like McDonald's Corp (MCD.N: Quote, Profile, Research ), Burger King Holdings Inc (BKC.N: Quote, Profile, Research ) and CKE Restaurants Inc's (CKR.N: Quote, Profile, Research ) Carl's Jr.[12]

The transaction values the Dublin, Ohio burger chain at about $2.3 billion, not including debt.[52]

In a tough environment for restaurants, the long battle by Peltz's Triarc ends with $2.34B all-stock agreement. [11] Triarc Companies Inc., is a holding company owned by Peltz, hopes to save 60 million dollars by doing away with duplicate corporate functions and streamlining support services.[44] Triarc is owned by super-investor Nelson Peltz who has helped revive companies like Heinz and Snapple.[54] Nelson Peltz is the worst thing that could have ever happened to WEN. You want to see a stock slide? Stay tuned.[20]

Thursday's heavy load of economic data and earnings news was both good and bad, but investors chose to focus on the positive, causing stocks to close solidly higher.[26] Stocks have been stuck in a narrow trading range, Johnson says. He expects stocks to "tread water" until some especially good earnings news comes along to launch equities higher.[26]

The fast-food giant sees earnings per share jump 31% on strong international sales. [9] Excluding certain extraordinary items, it earned 10 cents per share, which missed Wall Street's expectations of 17 cents by a wide margin.[24]

Analysts surveyed by FactSet expected earning of 17 cents a share, on average.[52] Adjusted earnings fell to 10 cents a share, from 16 cents a share in the year-ago period.[52]

Pershing has had a stake in McDonald's in the past and has had success buying into undervalued restaurant companies, said John Owens, a Morningstar analyst. It looks as if Pershing is doing the same with Wendy's, he said. [49] Wendy's, which operates some 6,600 restaurants in the United States and Canada, was set up in 1969 by David Thomas. He died in 2002, and the restaurant's business was never the same after that.[36]

Wendy's interest was distributed to shareholders as a dividend a long time ago.[28] BTW, this deal closed at about $3 below what we expected. Don't know yet if this will sail through shareholder approval, so this may not be over just yet.[20] I really expected the board of directors to hold out for $30 (you can read the full op-ed piece from right when the deal was announced).[48]

Eleven months of new homes are sitting on the market, the largest inventory since Sept. 1981, while the median sales price fell from $244,200 to $227,600. [26] The price is a premium of 6 percent from the company's closing price of $25.32 Wednesday.[23] The company closed the quarter with cash and cash equivalents of $207.56 million.[17] The latest quarter results included pre-tax expenses of $6.7 million for special committee and $0.2 million towards restructuring charges.[17]

The results, reported yesterday, showed that net income declined to $4.1 million in the period compared with $14.7 million a year earlier.[8] In the last five years Arby's has earned 7 million dollars cumulative, but Nelson has been paid 61 million big ones. He certainly knows how to run an organization.[20]

Smith cited the 2005 acquisition of RTM Restaurant Group, Triarc's largest franchisee with 775 Arby's restaurants.[30] Triarc is the franchisor of the Arby's restaurant system which has 3,700 outlets in the U.S. and Canada.[15]

Previously reported first-quarter same store sales at U.S. company-operated restaurants fell 1.6%, compared to a rise of 3.8% a year ago.[10] There are fewer locations open today than there were a year ago. In a nutshell, investors aren't going to like this exit strategy, but the company's lackluster performance wasn't going to smoke out higher bids in the near term.[31] The burger chain formed a special committee to decide the company's fate last year, and released a statement in January that the decision was nearly complete.[45] With a 10% stake in the company before the merger, Mr. Peltz stepped down from the board last year to avoid conflicts involved in a possible purchase.[45] If Peltz would have gotten the Trian Acquisition I Corp. (AMEX: TUX ) special purpose acquisition company (SPAC) involved, that $30 level could have probably been reached.[48]

Mr. Peltz and Peter May, Trian's president, together own about 35 percent of Triarc's voting power.[28] On April 17, the board turned down two bids from Triarc and Trian Fund Management, which is Mr. Peltz's hedge fund.[6]

A support center in Atlanta will oversee all company matters and central service functions, leading to cost savings, according to Triarc. [14] The company's EBITDA margins slipped 110 basis points due to increased breakfast costs, lower than expected sales and increased commodity costs, though partly offset by labor efficiency and menu price hikes.[17]

Smith said the new company hopes to improve margins at company-owned stores and improve efficiency to create savings for the combined brands. "Through the execution of major operating improvements and the realization of synergies, we expect to generate substantial value for shareholders," he said.[5] A holding company through its subsidiary Arby's Restaurant Group, Inc., is a franchisor of the Arby's restaurant system.[24]

The euro against the U.S. dollar fell 1.24% to $1.5692, while the price of gold dropped $19.60 to $889.40 per ounce. [26] On the NYMEX, June crude oil was down $2.34 to $115.96 per barrel.[26]

The investment firm owns enough stock to '''get the attention of other shareholders,''' who still must approve the deal, Lombardi said. [49] The all-stock deal ends the involvement of the Thomas family, which started the chain in Columbus in 1969.[8]

SOURCES

1. Deal of the Day
2. Columbus Based Wendys Bought Out by Atlanta Based Arbys | Cleveland Leader
3. Arby's to buy Ohio-based Wendy's - Business Courier of Cincinnati:
4. eCanadaNow.com - Wendy's Merges With Arby's Parent Company
5. Arby's parent inks $2.3B deal for Wendy's - South Florida Business Journal:
6. Arby's Owner Makes A Deal For Wendy's
7. Bloomberg.com: Worldwide
8. The Columbus Dispatch : Wendy's: End of an era
9. Arbys Operator Triarc Gobbles Up Wendys | Food and Beverage | BKC CMG DRI MCD TRY WEN YUM - TheStreet.com
10. Will Triarc Save Wendy's?
11. Arby's-Wendy's Combo Finally Finds the Beef - - CFO.com
12. UPDATE 3-Peltz's Triarc to buy Wendy's for $2.4 billion | Industries | Consumer Goods & Retail | Reuters
13. index
14. Arbys Parent Triarc Agrees to Buy Wendys for $2.3 Bln - International Business Times -
15. AFP: Triarc to gobble up US hamburger chain Wendy's
16. Arby's Parent Buying Wendy's In Stock Deal
17. Wendy's Q1 Profit Declines Sharply On Costs, To Merge With Triarc - Update [WEN] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
18. Wendy's, Arby's parent will merge - Kansas City Business Journal:
19. Wendy'''s sold to Nelson Peltz, owner of Arby'''s restaurant chain, for $2.34 billion - Food and Bev US
20. Deal Journal - WSJ.com : Here's the Beef: Competition Whetted Peltz's Appetite for Wendy's
21. Did Wendys Get Short-Changed? - Mergers, Acquisitions, Venture Capital, Hedge Funds -- DealBook - New York Times
22. Atlanta's Triarc to buy Wendy's for $2.34 billion | ajc.com
23. The Associated Press: Arby's owner buying Wendy's for $2.34 billion in stock deal
24. Triarc Buys Wendy's - Portfolio.com
25. WHKP 1450 AM Radio - Arby's Buys Wendys
26. Stocks Finish Higher
27. Wendy's 1Q profit falls on special committee costs - Business First of Columbus:
28. Wendys to Sell Itself to Peltzs Triarc - Mergers, Acquisitions, Venture Capital, Hedge Funds -- DealBook - New York Times
29. Food Billionaire To Buy Wendy's - Forbes.com
30. New Wendy's CEO promising improvements, better franchisee relations - Atlanta Business Chronicle:
31. Arby's Gets the Red-Headed Girl
32. Wendy's Accepts $2.34B Buyout Offer
33. The Canadian Press: Nelson PeltzIs Triarc swallowing Wendy's burger chain in all-stock deal
34. United raises many fares | Freep.com | Detroit Free Press
35. Triarc Companies Buys Wendy's - Restaurant News - QSR Magazine
36. Arby's Buys Wendy's For $2.34B | April 27, 2008 | AHN
37. Arby's chews Wendy's - DailyBulletin.com
38. Dayton, Ohio Weather, News, Sports and Entertainment WDTN.com, 2 On Your Side News and Weather: Arby's owner buying Wendy's for $2.34 billion stock deal
39. Wendy's International (WEN) NewsBite - Wendy's Surges on Merger News
40. Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
41. Owner of Arby's purchasing Wendy's | courier-journal | The Courier-Journal
42. For some, Wendy's buyout unappetizing
43. Fast food restaurant Wendy's to be swallowed by rival Arby's - Business
44. Arby's Owner Is Buying Wendy's - News |WJTV - News Channel 12 - Jackson, MS
45. Wendys Merges With Triarc - Advertising Age - News
46. Peltz trumps Kelso to buy Wendy's for $2.3bn
47. Wendy's to announce transaction with Peltz: report | Reuters
48. Wendy's buyout: A huge score for Peltz,Triarc and its investors - BloggingBuyouts
49. The Columbus Dispatch : Hedge fund is wild card in Wendy's sale
50. Nightly Business Report . Arby's Finds The Beef By Buying Wendy's | PBS
51. BBC NEWS | Business | Wendy's chain bought for $2.3bn
52. Wendy's to merge with Triarc at 6% premium to Wed. close - MarketWatch
53. The Columbus Dispatch : Wendy's timeline
54. Untitled
55. Arby's Buys Wendy's for 2.34 Billion; Triarc Square Roast Beef? - Associated Content

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Will Triarc Save Wendy's?

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