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.