- The Washington Times - Friday, April 25, 2008

COLUMBUS, Ohio (AP) — After at least two rejections, billionaire Nelson Peltz finally succeeded in landing Wendy’s in a $2.3 billion deal that would add the chain known for its square burger and chocolate Frosty dessert to his ownership of Arby’s and its roast beef sandwiches.

Now, the investor known for agitating corporations to boost their stock price has to figure out how to make both profitable while the economy slumps and more Americans are saving money on food and fuel by staying home to eat.

Atlanta-based Triarc Companies Inc., owned by Mr. Peltz, said yesterday 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.

Mr. Thomas’ daughter, Pam Thomas Farber, said the family is 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 Ms. Farber, 53.

If her father were alive to hear news of the buyout, “he would not be amused,” she said.

Triarc will pay about $26.78 per share for the company, which has about 87 million shares outstanding. Wendy’s shares rose 4 percent to $26.39 in trading yesterday. They traded as high as $42.22 last summer, not long after Wendy’s announced the formation of a special committee to boost its stock price.

The offer is well below the $37 to $41 per share that Mr. Peltz said last summer he was ready to offer for Wendy’s.

Under the terms of the deal, expected to close in the second half of the year, Wendy’s shareholders will receive 4.25 shares of Triarc Class A stock for each share of Wendy’s stock. 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.

Mr. Peltz has pushed for change at Wendy’s — including the spinoff of the Tim Hortons coffee-and-doughnut chain and cutting corporate expenses — since 2005 to increase the company’s stock price. His Trian Fund and his allies own 9.8 percent of Wendy’s stock.

The deal arrives during Wendy’s struggles with declining profits and weak sales compared with rivals McDonald’s and Burger King.

Wendy’s said yesterday that its first-quarter profit was down 72 percent to $4.1 million, or 5 cents a share, in part because of expenses tied to the work of a special board committee that has studied ways to boost the company’s stock. Revenue fell to $513 million from $522 million a year ago.

Wendy’s has failed to connect with consumers in several advertising campaigns that have been tried since Mr. Thomas’ death in 2002, and it has experienced limited success in adding new products and with its breakfast menu. Mr. Thomas, always wearing a white short-sleeved shirt and red tie, became a household face when he began pitching his burgers and fries in television commercials in 1989.

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