Peltz makes offer to buy Wendy's
Nelson Peltz's Triarc Cos made an offer for Wendy's International Inc that was less than the $3.2 billion the billionaire investor said he might pay in July.
Peltz, who has pressured Wendy's management to boost its stock price since buying a stake in 2005, made the offer after the third-largest US hamburger chain said a possible sale was being delayed by turmoil in the credit markets last month.
The bid is below the range of $37 to $41 a share that Peltz had said he'd consider proposing, the investor's Trian Fund Management LP said. Peltz didn't disclose the size of the cash and stock offer.
"Most of us who watch this didn't really think that the numbers he was talking about would hold true now because of the change in the credit world that has transpired over the past three months," said Dennis Lombardi, executive vice president of foodservice strategy at WD Partners in Dublin, Ohio.
Wendy's formed a special committee to explore a sale in April after Peltz, whose fund is the company's largest shareholder, urged management to increase profit and cut costs. The activist investor also owns the Arby's fast-food chain through his stake in Triarc.
The collapse of the market for subprime mortgages, which are made to people with poor credit or high levels of debt, has resulted in stricter lending standards and higher borrowing costs.
Financing is "less available and more expensive, and deals are harder to do, therefore prices go down", Lombardi said.
Wendy's profits have been hurt in the past year by higher beef and dairy prices and competition from McDonald's Corp.
Trian said the bid depends on the kind of funding a transaction might get. Carrie Bloom, the fund's spokeswoman, declined to comment beyond the filing.
Bloomberg News
(China Daily 11/15/2007 page16)
