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End is seen in the bidding for Wendy’s

NEW YORK Wendy’s International Inc. could have a buyer within a few weeks, sources say.

Bids are expected to be due Nov. 12 and financing through Wendy’s bankers has been arranged, according to The Wall Street Journal, which cited anonymous sources it said were familiar with the deal. Sources who spoke to Nation’s Restaurant News said a deal for Wendy’s would likely be completed prior to Dec. 1. Standstill agreements that blocked certain potential suitors from purchasing more Wendy’s stock or trying to buy the company also expire Dec. 1.

In addition, one possible bidder, activist investor Nelson Peltz, filed on Thursday for a $750 million public offering of a new so-called blank-check company, Trian Acquisition I Corp., that will seek acquisitions. Blank-check companies consist primarily of capital and an intention to buy businesses, without any operations generating revenues or profits in the meantime.

The IPO from Peltz and his partners may not be related to a possible bid for Wendy’s. According to regulatory filings, Trian Acquisition has yet to “have any specific business combination under consideration.” Nor has it “had any discussions É with respect to such a transaction.”

Still, Peltz has been active in the restaurant industry for years, amassing a significant stake in CBRL Group Inc., parent to the Cracker Barrel chain, as well as in Wendy’s and using those holdings to press for changes in the companies’ strategies.

Peltz currently holds more than 9 percent of Wendy’s shares through his various investment vehicles and also serves as nonexecutive chairman and the largest shareholder of Triarc Cos. Inc., the parent of the Arby’s quick-service brand. Peltz has made it clear that he is interested in acquiring Wendy’s and has said publicly that Triarc could offer as much as $41 per share, or about $3.6 billion. But some sources contend that Peltz broadcast that possible price for Wendy’s, which currently trades in the mid-$30 range, as a tactic to drive up other bids so he could sell his shares for a larger profit.

Other potential suitors, including Wendy’s franchisee Gene Carlisle, have said that Wendy’s may not be worth more than $2.5 billion, especially when factoring in the cost of remodeling the system’s restaurants. Carlisle said a comprehensive renovation is imperative, and Wendy’s management has set such an initiative as a priority for 2008.

Additional disclosed bidders include a group led by William Foley, current chairman of financial services firm Fidelity National Financial and former chairman and chief executive of CKE Restaurants Inc. Foley is reportedly backed by private-equity firms Thomas H. Lee Partners LP, Oaktree Capital Management LP and Ares Management LLC.

Wendy’s franchisee David Karam at Cedar Enterprises also has been identified as a bidder. Karam is backed by private-equity funds Kelso & Co. and Oak Hill Capital Partners and reportedly has the backing of the family of Dave Thomas, the founder and longtime guiding force for Wendy’s, which was named after his daughter.

Wendy’s has decided to use “staple financing,” or pre-arranged financing arranged by the company’s bankers, J.P. Morgan Chase & Co. and Lehman Brothers Holdings Inc. The financing most likely will include loans backed by an asset-backed securitization based on Wendy’s franchisees’ future royalty payments, sources told Nation’s Restaurant News. The financing, however, has been difficult to complete since the credit markets tightened this summer, sources added. According to a Nov. 1 report in The Wall Street Journal, the terms have finally been arranged, albeit with stipulations that could lead to lower purchase offers.

According to the Journal’s source, Wendy’s will not rely on a bridge loan while its securitization is being arranged, which is a typical move and one currently being used in IHOP Corp.’s $2.3 billion acquisition of Applebee’s International Inc. Instead, the Journal’s report said that Wendy’s bankers have a “backstop loan,” which is highly conditional and holds provisions that could allow the banks to back out of the deal should credit markets further deteriorate.

Peltz has said in public filings that he would prefer the flexibility of arranging his own terms, rather than Wendy’s pre-arranged financing.

Wendy’s officials said the company could not comment. The Dublin, Ohio-based company operates or franchises more than 6,600 namesake, quick-service restaurants worldwide.

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