Posted on 04/24/2008 7:24:09 PM PDT by kingattax
Roast Beef Sandwich Chain Buys Square Burger Biz For $2 Billion
(AP) After two past rejections, the owner of Arby's shaved roast beef sandwich restaurants is buying Wendy's, the fast-food chain famous for its made-to-order square hamburgers and chocolate Frosty dessert, for around $2 billion.
Triarc Companies Inc., which is owned by billionaire investor Nelson Peltz, said Thursday it will pay about $2.34 billion in an all-stock deal for the nation's third-largest hamburger chain started in 1969 by Dave Thomas. Wendy's had rejected at least two buyout offers from Triarc.
Thomas' daughter Pam Thomas Farber said the family was devastated by the news.
"It's a very sad day for Wendy's, and our family. We just didn't think this would be the outcome," said Farber, 53.
If her father were alive to hear news of the buyout, "he would not be amused," she said.
Thomas became a household face when he began pitching his burgers and fries in television commercials in 1989.
Wendy's International Inc. deferred comment to Triarc, which had nothing further to say right away.
Triarc will pay about $26.78 per share for the company, which has about 87 million shares outstanding. The price is a premium of 6 percent from the company's closing price of $25.32 Wednesday.
Under the terms of the deal, which is expected to close in the second half of the year, shareholders at Wendy's will receive 4.25 shares of Triarc Class A stock for each share of Wendy's stock they own.
Atlanta-based Triarc said its shareholders will have to approve a charter amendment in which each share of its Class B stock will be converted into Class A stock.
The Wendy's board has been studying strategic alternatives since early last year, and expenses related to that contributed to the company's 72 percent drop in first-quarter earning announced Thursday.
Wendy's said its profits totaled $4.1 million, or 5 cents, a share for the quarter ended March 30 compared with a profit of $14.7 million, or 15 cents a share, a year ago. Revenue was down slightly to $513 million from $522 million a year ago.
Wendy's stock is well off its high for the past year of $42.22 that it reached shortly after the committee began its work in the summer. It fell 3 cents to $25.39 in early trading Thursday.
Sales have slid in a struggling economy that has hurt other restaurant chains, too.
The deal caps two chaotic years for Wendy's in which it has sold or spun off operations, slashed its corporate staff and had its wholesome image tarnished by a woman who falsely claimed she found part of a finger in her chili.
Triarc said it will also change its name to include the Wendy's name.
Pushed by activist shareholders, Wendy's spun off its Tim Hortons coffee-and-doughnut chain and sold its money-losing Baja Fresh Mexican Grill. Chairman and CEO Jack Schuessler abruptly retired in March 2006, months after a woman and her husband were sentenced to prison for extortion for their plot in March 2005 to plant part of a human finger in a bowl of chili at a San Jose, Calif., Wendy's restaurant and claiming it was served to her.
Farber said the family didn't think much of Peltz' and Triarc's tactics.
"They came after them (Wendy's) and came after them and came after them. They spun Tim Hortons off, they did this, they did that. They did everything they asked but it wasn't enough."
Farber said she had just gotten off the phone with her sister Wendy, 46, the company's namesake.
"She's feeling horrible. She just is devastated," Farber said.
Farber said the family had a supported an alternate bid led by Wendy's franchisee David Karam, president of Cedar Enterprises Inc.
"We knew what Dave Karam's commitment was to Wendy's, his family's commitment — just as ours. His dad was a very good friend of our dad's and was one of the very first franchisees, so there's a lot of history."
Peltz, who runs the Trian Fund, and his allies own 9.8 percent of Wendy's stock. Arby's has more than 3,000 restaurants.
He had argued in a letter to Wendy's chairman James Pickett that Triac would be a natural buyer of Wendy's. Peltz gained three seats on the company's board last year.
Thomas, who died in 2002, opened his first restaurant in a former steakhouse on a cold, snowy Saturday in downtown Columbus on Nov. 15, 1969. He named the chain after his 8-year-old daughter Melinda Lou — nicknamed Wendy by her siblings.
The smiling Thomas, always wearing a white short-sleeved shirt and red tie, touted the virtues of fast food in humorous ads, often featuring big-name stars such as bluesman B.B. King and soap opera queen Susan Lucci. He appeared in more than 800 ads.
Wendy's, based in suburban Dublin, operates about 6,600 restaurants in the United States and abroad. It trails McDonald's and Burger King Holdings Inc. in the burger business.
What school?
No kidding. I wonder if that's where Cane's got their idea from.
Guess it’s good it wasn’t McDonald’s. We’d have to hear about the merger of a Big Mac and a Hot ‘n Juicy.
“All your Wendy’s are belong to us”
I think most of the 99 cent menus are going to disappear soon....there was an article in the Wall Street Journal about how much the industry is losing with them.
George Mason University.
Good but pricey.
I was figuring HS crew. What year?
That is great news about Roy Rogers Roast Beef still available in Maryland, I confess to not having been back to that socialist paradise in more than 10 years, having grown up in Wheaton/Silver Spring.
Another great burger franchise that has sadly gone off into the shadows of history is noneother than Little Tavern, i.e. ‘Buy ‘em by the bag!’
Rest in Peace Harry Duncan! (founder, Little Tavern)
We’re on the same page FRiend! Of all the various sauces and condiments, I think Arby’s Sauce is probably the best of them all!
I’m with ya FRiend, and a big Euro-cross-bar on the Kentucky Fried Rat! LOL
Wendy’s hamburgers are a lot better than McDonald’s.
I’m hearing that Roy Rogers may NOT be gone (at least in the Washington Metro area?), and that is good news.
Is O’Brien’s Real Pit Barbeque still in business around there?
They used to have the most fabulous food when I was there back in the 80’s...
Hook a dynamo up to O'l Dave's grave, free energy for everyone.
Years ago associates and myself were stuck in the office at lunchtime, and somebody went to get us all something to eat. Arby’s is what they brought back to us. Starving I ate it. Never been to an Arby’s since.
I noticed the one near us is gone now, but that location had been a Burger King before it was Arby’s, and it also closed. Probably just a lousey location.
If we eat out at all we only go to the local chain called “Farmer Boys”. It’s great. Otherwise we eat at the best place in town known to us as the Rockin’ QS Ranch, it’s absolutely the best.
Graduated 1998.
True. That's why I'm glad that I don't live too close to one, and only get the chance to go there every six weeks or so. Seven bucks is a lot to pay for a fast food combo, but everything is perfect -- chicken, fries, Texas Toast, that amazing sauce. If one was open right now, I'd go drive the 20 minutes to Metairie to get some.
Was that the A-Hole that changed the recipe on the Old Timer with Cheese? I stopped going there when they did that. Wheat bun and Cheddar.. Just wasn't the same.
I'm afraid you're right. Wendy's is the only fast burger joint with a burger that still tastes somewhat like a real hamburger, and some of th chicken sandwiches are good as well.
Arby's roast beef sandwich was pretty good 25 years or so ago when it still used actual roast beef, and the mocha shakes were very good. But then later on they started serving the slimy, gooey, gelatinous, foul smelling slop they now call roast beef and it's downright awful. I stopped by an Arby's a couple of years ago when the neighbors who were with me at the time decided they wanted something from there. The slop they put on my bun looked and smelled much more like canned dog food than roast beef. Hungry as I was, it stunk so bad I just couldn't eat it. I pretended to eat the crap so as to not insult the neighbor's who paid for everything and seemed to like the stuff, but I wrapped up most of it and sneaked it back into the bag which ended up in my garbage can at home. Yuk, never again even if the neighbors pay for it.
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