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.
I ate at Arby’s over thirty years ago. They weren’t using beef back then either. Just some salty, preformed, artificial color, artificial flavor concoction that they squeezed into a plastic case and sliced on an electric slicer. I remember they served one of the sandwiches on an onion roll and smothered the meat substance with some yellow plastic they said was cheese. I always hated their sandwiches but my hubby (then boyfriend) used to take me there because I loved the fries.
Their fries weren’t made out real potatoes either. Some reconstituted mashed flakes extruded into a vat of bubbling oil. I loved the taste though. None of the other fast food restaurants had any fries like them. It didn’t matter that they weren’t real potatoes. When they stopped serving those fries, I stopped eating there.
I went to a Wendy’s the other day and instead of a hot and juice burger, I got a paper thin piece of beef on a bun. Not only was it not hot and juicy, a McDonald’s coin sized burger would have put it to shame. I was so mortified I contacted Wendy’s.
I am really getting upset at these attempts to hide price hikes by cutting back on the portion sizes. Do they really think no one is going to notice? Once management started using a man in a Wendy’s wig for product identification purposes I should have known they did not have a clue as to how to care for Dave’s company. That guy in the wig and that creepy Burger King both give me nightmares.
Wendy's has been unfairly attacked with stupid insane hoaxes almost from day one. The finger was an extortion ploy and the woman was convicted for it. I'll take a burger and fries from Wendy's made to order any day over a McSoy ala Cheese Mac with PC fried french fries that taste like cold deep fried cardboard. I've never been disappointed at Wendy's. I recently gave up on Sonic though. Subway is fine as is Arby's most of the time. Bugger King I'll never set foot in again. It started out like Wendy's with a great tasting burger made to order and went down hill about 15 years ago. Wendy's at least kept the quality up to par.
Dave Thomas learned from some of the best in the industry The Regas Brothers. His square burger was actually around for decades and he likely got the idea from a local burger place where he worked in Knoxville as a kid called the Blue Circle which was across from where he worked in an upscale restaurant owned by the Regas family. But Dave made the burgers much thicker with better quality beef then added the trimmings.
I have fond memories of Arby's as a kid because there weren't any where we lived but there were where my grandparents lived, and Arby's was one of my grandpa's favorites. So I always associate Arby's with him.
Awesome. Well greetings to my fellow Patriot.
Pretty obvious that you have never had a Lion's Choice RB Sandwich.
And I can't eat that sliced loaf on a bun that Arby's serves up, and alleges is roast beef, "roast anything" other than warmed meat trimmings pressed into an oval form and held together with coagulated fat.
Try and order a "rare" RB sandwich next time you venture into an Arby's and laugh at the puzzled look you get from the server.
Perfect observation. In my college days - almost 25 years ago - I used to marvel at how Wendy's could fill a person's order with a great burger within the space of the few seconds it took the cashier to make change.
Now, regardless of location it seems, the service takes forever and the product is often sub-standard.
I don' tknow which came first. Guthrie's secret is the sauce...and a simple menu.
I dont know if it is the same as the old Roy Rogers. From the site: "Roy Rogers are currently located in nine states throughout the Mid-Atlantic region and are open 7 days a week to serve you."
Is OBriens Real Pit Barbeque still in business around there?
I've never heard of it, but I've only been here for two years...
There are still some Roy Rogers actually. Mostly at highway rest stops. We have a few here in Jersey. Love the Gold Rush Chicken Sandwich.
Creepiest. Icon. Ever.
I don’t like clowns or mimes (I thought they were scary when I was little...something about that white makeup and the way it makes eyes look weird and sinister). I fear an entire generation will grow to fear paper mache because of the BK ‘Uber Creepy’ King. Human arms and legs...fake, stationery, shiny head—shudder. I think a class action suit against BK is in order.
I guess I underestimated how long ago it was that Arby's served real roast beef. The Arby's I was referring to was in FL sometime around the late 1960s. You're right, by the mid or late '70s the Arby's "roast beef" had become a molded, gelatinous, foul smelling lump of unidentifiable glop. The only item I liked at Arby's after they stopped using real roast beef was the chocolate/coffee milk shakes, I think the flavor was called Jamocha.
Except for one time a couple of years ago when my neighbors wanted to stop at an Arby's while we were traveling together I haven't eaten there since the mid-'70s. It was even worse than I remembered, and if I have any choice in the matter it I won't ever eat there again.
Add "Arby's" to the sentence and it's even more unbelievable. I'm not sure what it is that Arby's serves, but it isn't human food.
How do you figure?
They were hostily taken over in essence, and that is never a good mood for anyone. Gutting a still very much alive and living entity for a few folks to make some dough at the expense of thousands is not a good thing.
I have no idea, but probably the taste factor?
Not eating Sonic isn't really a sacrifice as the only ones are in the 'burbs, and we've got a local chain (Bud's Broiler) that's better than any of the national chains. I mostly eat Sonic when I'm out of town it seems. Not any more, though.
Guthrie’s came first. Their website said that they were started in(iirc) the 60’s. Cane’s is only a few years old.
Yea. I have a friend whose grandfather built a cabin up there off "The Kettle" way back in the 40's. It's been added onto over the years, and now with two grandsons and their families, it was redone to add a second floor. Still, many aspect of the original are still there, and it still sits on a single lot.
Those kinds of generational upgrades I can see. But this buying up two or three adjacent lots, razing the cottages and building a monstrosity really burns my butt. Those are the same people that take 30+ ft. cabin cruisers out to the sand bar so everyone can see how affluent they are.
Who cares. A good sized Tri-Toon and floats (and a good supply of beer) is all that's needed for a relaxing day out at the sandbar.
Wow, I haven’t thought about Rax in probably 20 years. Great RB sandwiches of varying sizes. As for Roy Rogers, they had some in Ohio and West Virginia as of five years ago. They weren’t bad either.
I’m not sure how I feel about this takeover. Wendy’s was in need of some kind of shake up, but I’m not sure a “merger” with Arby’s is the best answer.
Have you had Bojangles fried chicken? They’re mostly a southeast chain (based out of Charlotte, IIRC). Otherwise, the best “fast food” chicken I’ve had is from Bill Miller BBQ in San Antonio. Doesn’t do you much good outside of South Texas, though.
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