Wendy's Suitor Lowers Initial Valuation

DUBLIN, OH-According to an SEC filing, companies affiliated with New York City-based Triarc Cos. Inc. submitted a bid on Nov. 12 for the fast-food chain. While the filing does not disclose the price of its offer, it states the “proposed purchase price is below the valuation range that Triarc had indicated it would be prepared to offer in its July 30, 2007 letter (to Wendy’s).”

Locally based Wendy’s formed a special committee this April to explore strategic alternatives, which included a possible sale, and later set Nov. 12 as the date for bids. According to published reports, David Karam, a Wendy’s franchisee; and a group led by William Foley, chairman of Fidelity National Financial Inc., had expressed interest in addition to Triarc.

Fidelity decided against submitting a bid, according to reports. The Triarc bid is the only publicly disclosed formal offer submitted by the deadline.

Its July offer indicated the company would be prepared to pay between $37 a share and $41 a share for Wendy’s stock, which would put the price tag at between $3.2 billion and $3.6 billion. Triarc’s Nov. 12 offer for a purchase of 100% of Wendy’s equity, according to the SEC filing, “would be paid primarily in the form of cash with a portion to be paid in the form of Triarc equity.”

Through affiliates, which include Trian Partners GP LP, Triarc controls nearly 10% of WEN common stock. Nelson Peltz is chairman of Triarc, which is the franchisor of the Arby’s chain, and also CEO of Trian Fund Management LP.

At the close of trading on the NYSE on Wednesday, Nov. 14, following public disclosures of the offer, shares of WEN common stock traded at $30.67 a share, down 3.1% for the day, which was a down day for Wall Street. This compares with a 52-week high of $42.22 on May 7 this year and a 52-week low of $29.56 a share on this Aug. 16.