Wendy's agrees to open its books to Peltz

DUBLIN Ohio Wendy’s International Inc. has agreed to open its books to Arby’s parent company and the investment funds under activist investor Nelson Peltz’s umbrella under a disclosure agreement that could lead to a potential acquisition of the No. 3 burger brand by Peltz’s group.

Under a confidentiality agreement signed Monday and reported today in a securities filing, Wendy’s would provide certain confidential and proprietary information to Arby's parent Triarc Cos. Inc., in which Peltz owns a 34-percent stake, and Peltz’s investment arm, Trian Fund Management, which already holds a 9.8-percent stake in Wendy’s. The agreement had been sought by Peltz so Triarc and Trian could evaluate whether to purchase all or part of Wendy’s.

Dublin-based Wendy’s operates or franchises the 6,300-unit namesake chain and had begun in April to explore strategic options, including a possible sale. Peltz has been an active investor in Wendy’s for more than two years, and he was instrumental in pushing Wendy’s to shed its Tim Hortons fast-casual brand and its troubled fast-casual Mexican concept, Baja Fresh.

According to terms of the confidentiality agreement, Triarc and Trian will not be able to purchase additional shares in Wendy’s, or make a move to purchase the company, prior to Dec. 1 without the burger company’s agreement.

Peltz has said he regards Arby’s parent Triarc, where he serves as non-executive chairman, as a “natural, strategic buyer” for Wendy’s, but he and his group had not been able to come to an agreement with Wendy’s over terms of a confidentiality agreement. Such an agreement is a typical first step in a merger or acquisition because it allows interested suitors to view proprietary information while calculating a prospect's worth.

Prior to today’s news, Peltz had said he was prepared to offer between $37 and $41 per Wendy’s share, or between $3.2 billion and $3.6 billion, to acquire the burger brand.

Triarc has worked this year to shed its non-restaurant holdings, which include an asset management firm, so that it could become wholly a restaurant company. In Triarc’s latest filings with securities regulators, it said it was actively pursuing restaurant acquisitions. Arby’s is a system of about 3,600 restaurants.