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Wendy’s/Arby’s a takeover target

Wendy’s/Arby’s a takeover target

Wendy’s/Arby’s Group Inc. chairman Nelson Peltz disclosed Thursday he received an inquiry expressing interest in the acquisition of the fast-food company, according to documents filed with the U.S. Securities and Exchange Commission.

In the filing, Peltz indicated he is considering the matter, which was made by an unnamed third party, and would review his options as well as alternatives with regard to the possible acquisition of the company. Peltz’s Trian Fund Management LP, which owns about 23.5 percent of Wendy’s/Arby’s Group, is the company’s largest shareholder.

The filing further stated that Peltz “expects to contact and discuss a possible transaction involving [Wendy’s/Arby’s] with potential debt and/or equity financing sources, other shareholders of the company and other interested third parties.”

The news sent the company’s stock price up 7.1 percent to close at $4.65 Friday.

Takeover talk has run rampant in the restaurant industry this year as private-equity interest has returned to the sector. Deals so far this year – pending or otherwise – have included transactions for Papa Murphy’s, CKE Restaurants, Wingstop, Captain D’s, Del Taco and Rubio’s. Speculation has sprung around California Pizza Kitchen, Red Robin Gourmet Burgers and Bob Evans.

Wendy’s/Arby’s declined to comment on Friday.

The Atlanta-based company operates or franchises more than 10,000 restaurants worldwide under the Wendy’s Old Fashioned Hamburgers and Arby’s brands. It was formed in 2008 when Triarc Cos. Inc., then the parent company to Arby’s, and an entity controlled by Peltz, acquired Wendy’s for about $2.3 billion.

The restaurant company has struggled for some time, most recently reporting significant sales and traffic declines at the Arby’s brand, which recently named industry veteran Hala Moddelmog as its new chief executive.

For the first quarter ended April 4, the company narrowed its net loss to $3.4 million, or 1 cent per share, compared with $10.9 million, or 2 cents per share, in the same quarter a year ago.

Total revenue fell 3 percent to $837.4 million. Same-store sales at Wendy’s domestic units rose 0.8 percent, but plunged 11.5 percent at Arby’s.

Contact Elissa Elan at [email protected].

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