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Ohio founder's daughter says $2 billion deal is sad for family
By Mark Williams
Associated Press
Published on Friday, Apr 25, 2008
COLUMBUS: After two past rejections, the owner of Arby's restaurants is buying Wendy's, the fast-food chain famous for made-to-order square hamburgers and chocolate Frosty desserts, for about $2 billion.
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. Wendy's had rejected at least two buyout offers from Triarc.
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.
Wendy's International Inc. deferred comment to Triarc, which had no elaboration.
Triarc will pay about $26.78 per share for the company, which has about 87 million shares outstanding. The price is a premium of 6 percent from the company's closing price of $25.32 Wednesday. Shares on Thursday rose $1.07 to close at $26.39.
The deal 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 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.
Wendy's board has been studying options 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 a profit of $14.7 million, or 15 cents a share, a year ago. Revenue was down slightly to $513 million from $522 million a year ago.
Wendy's stock is well off its high for the past year of $42.22 that it reached shortly after the committee began its work in the summer.
Sales have slid in a struggling economy that has hurt other restaurant chains, too.
The deal caps three chaotic years for Wendy's in which it has sold or spun off operations and slashed its corporate staff.
Triarc said it will also change its name to include the Wendy's name.
Pushed by activist shareholders, Wendy's previously spun off its Tim Hortons coffee-and- doughnut chain and sold its money-losing Baja Fresh Mexican Grill. Chairman and CEO Jack Schuessler abruptly retired in March 2006.
Peltz, who runs the Trian Fund, and his allies own 9.8 percent of Wendy's stock. Arby's has more than 3,000 restaurants.
He had argued in a letter to Wendy's chairman James Pickett that Triac would be a natural buyer of Wendy's. Peltz gained three seats on the company's board two years ago.
Thomas, who died in 2002, opened his first restaurant in a former steakhouse on a cold, snowy Saturday in downtown Columbus on Nov. 15, 1969. He named the chain after his 8-year-old daughter Melinda Lou — nicknamed Wendy by her siblings.
Wendy's, based in suburban Dublin, operates about 6,600 restaurants in the United States and abroad. It trails McDonald's and Burger King Holdings Inc. in the fast-food business.
COLUMBUS: After two past rejections, the owner of Arby's restaurants is buying Wendy's, the fast-food chain famous for made-to-order square hamburgers and chocolate Frosty desserts, for about $2 billion.
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