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NPC International Inc. has 394 Wendy's locations,

Wendy’s may withhold consent in Flynn-NPC deal: Report

Bankruptcy judge approves Flynn affiliates as stalking-horse bidder for burger, Pizza Hut locations

The Wendy’s Co. said it may withhold permission in the $816 million stalking-horse bid by Flynn Restaurant Group to acquire 394 locations of the burger brand and Pizza Hut units in NPC International Inc’s Chapter 11 bankruptcy case.

“We are not hopeful that we can grant consent to Flynn,” said Sean O’Neal of law firm Cleary Gottlieb Steen & Hamilton, representing Wendy’s, in a report by Bloomberg that called the move “a potential roadblock” for the deal.

NPC International, which operates more than 1,300 quick-service restaurants, filed for Chapter 11 bankruptcy protection in July.

The Dublin, Ohio-based burger chain hasn’t consented to Flynn buying the units in part because Flynn operates competing restaurants, including Arby’s and Panera Bread units, Bloomberg noted.

Affiliates of San Francisco-based Flynn Restaurant Group LP on Nov. 6 made the $816 million bid to buy NPC International out of bankruptcy. The two Flynn-affiliated companies are Wend American Group LLC and Hut American Group LLC.

Leawood, Kan.-based NPC said it will continue to solicit bids. A sale hearing is expected on Dec. 4.

The judge in the U.S. Bankruptcy Court for the Southern District of Texas in Houston gave the go-ahead Friday for the Flynn stalking-horse bid.

San Francisco-based Flynn Restaurant Group, which is headed by founder and CEO Greg Flynn, operates restaurants under four brands: Applebee’s, Taco Bell, Panera and Arby’s.

Wendy’s and Pizza Hut have both asked for the right to investigate potential franchisees in the bankruptcy sale. O’Neal said Wendy’s and Flynn are in talks about the issue, adding that regional Wendy’s franchisees are forming a consortium that might make a competing bid.

“Wendy’s is trying to put together a competing bid,” said NPC lawyer Ray Schrock of law firm Weil Gotshal & Manges in a Bloomberg report from the court.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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