Posted on 04/24/2008 7:24:09 PM PDT by kingattax
Roast Beef Sandwich Chain Buys Square Burger Biz For $2 Billion
(AP) 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.
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 nothing further to say right away.
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.
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 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.
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 earning 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. It fell 3 cents to $25.39 in early trading Thursday.
Sales have slid in a struggling economy that has hurt other restaurant chains, too.
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 wholesome image tarnished by a woman who falsely claimed she found part of a finger in her chili.
Triarc said it will also change its name to include the Wendy's name.
Pushed by activist shareholders, Wendy's 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, 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 claiming it was served to her.
Farber said the family didn't think much of Peltz' and Triarc's tactics.
"They came after them (Wendy's) and came after them and came after them. They spun Tim Hortons off, they did this, they did that. They did everything they asked but it wasn't enough."
Farber said she had just gotten off the phone with her sister Wendy, 46, the company's namesake.
"She's feeling horrible. She just is devastated," Farber said.
Farber said the family had a supported an alternate bid led by Wendy's franchisee David Karam, president of Cedar Enterprises Inc.
"We knew what Dave Karam's commitment was to Wendy's, his family's commitment — just as ours. His dad was a very good friend of our dad's and was one of the very first franchisees, so there's a lot of history."
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 last year.
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.
The smiling Thomas, always wearing a white short-sleeved shirt and red tie, touted the virtues of fast food in humorous ads, often featuring big-name stars such as bluesman B.B. King and soap opera queen Susan Lucci. He appeared in more than 800 ads.
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 burger business.
The best roast beef in our area is at Hardees. They top the Arby’s here for taste. Excellent stuff! Actually, around here most of the Hardees have great food, but I know down south where I have family, they would rather die than eat at Hardees.
They're still alive and kicking at interstate travel plazas in New York and New England.
I had some of their fantastic fried chicken outside of Syracuse last August.
No different concept than their main competitor, Chipotle.
That was a good one!
That's sad to hear. I really loved that whole area. Some of those cottages were older, but they were well kept up and very cozy.
I also liked Fort Wayne. It was a big little city. The people were very nice and you could be in the country within minutes. At one point, at least percentage wise, Fort Wayne had the largest number of cars per capita.
There’s a small burger chain here in my area called Pal’s. They have 20 locations, and currently are building their 21st. All locations are owned by the family that started the chain in 1956 and they refuse to franchise. People have literally begged them to franchise and they won’t do it. They’re the only restaurant chain to receive the Malcolm Baldridge award. Their store managers make well into six figures salary-wise. They actually had to build a traffic circle at one of their locations because the drive-thru was so busy. No matter how busy they are, the drive-thru works like a well-oiled machine, you’re in and out in almost no time. They almost never screw up an order and the quality is top notch for fast food.
If they ever sell out to another company, the new owners would probably ruin everything.
Check ‘em out:
I can’t believe I just read ‘food quality’ and ‘Wendys’ in the same sentence.
The headline would have been much more interesting if Wendy's bought Arby's.
The Carl's Jr. 99 cent burger is the best dewal in fast food these days. That and the Taco Bell Gordita when they are on sale for 99 cents.
Times Square, baby!
#130??
There goes a cheap meal for the kids. Arby’s prices are much higher.
Fictional home of Major Frank Burns.
No kidding? Wow, that's a stretch.
There was a sit-com in the 70s based upon a family living in Indianapolis. It was maddening to hear the fictitious Indianapolis family pronounce "Indianapolis."
It's under the PICKLE !!!
One Day At A Time
The beginning of Valerie Bertinelli's career.
Remember, MASH was set in 1951 and Burns always bragged to Hawkeye and Trapper that back in Fort Wayne he had a $35000 house and two cars.
haha! Clara Pellar.
I DO! In the 80's my brother and his wife split up and my brother got his son while his wife got their daughter.
I used to (repeatedly) ask John T (my brother's son) "Where's the Beef?!" ... and he quickly would reply "It's under the pickle!"
LOL!
Our Media Friends.
Those sure were different times.
Didn’t Marriot buy Roy’s? I loved their burgers, roast beef AND chicken!
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