Wendy's International
(NYSE:WEN) shares jumped more than 7 percent yesterday after Nelson
Peltz disclosed that Triarc would be willing to pay between $37 and $41
per share for the third largest fast food chain in the U.S. and the bid
could go even higher if he was allowed to see confidential information.
Shareholders have been waiting for such a buyout since April 24th, when
the company first began exploring strategic alternatives.
The
problem Peltz has been facing deals with the way financing on the deal
is structured. Certain conditions in staple financing created a
disadvantage for Triarc and other strategic buyers. Peltz wants to
explore other means of financing, but is facing problems with the way
the terms are structured. Meanwhile, he is also concerned about the
confidentiality agreement that Wendy's is seeking to have signed as
part of the sale process. The activist investor threatened to take more
hostile actions against the company if they do not revamp the agreement
to more reasonable terms.
Peltz's Triarc Cos (NYSE:TRY) is the
parent company of competing chain Arby's and has long been considered a
strategic buyer for the Wendy's chain. The activist investor also runs
Trian Fund Management, which owns a 9.8 percent stake in the company
and has been pushing the company to maximize shareholder value,
including the spin-off of Tim Horton and the sale of Baja Fresh. The
company is also considering the sale of Cafe Express.
In the
end, the idea of a $41 per share or possibly higher buyout is great
news for shareholders. And luckily, with Nelson Peltz behind the
company, it will not likely give up in pursuing an acquisition despite
difficult financing terms and an unreasonable confidentiality
agreement. Combined, these factors make WEN a stock
worth watching!
Related CompaniesMcDonalds Corp (MCD)Rubio's Restaurants (RUBO)Yum Brands (YUM)