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Arby's owner says Wendy's would be natural addition

Nelson Peltz, already a big shareholder in the burger chain, objects to a `standstill' clause.

July 04, 2007|From Reuters

Billionaire investor and major Wendy's International Inc. shareholder Nelson Peltz said Tuesday that his restaurant company, Arby's parent Triarc Cos., would be a natural buyer for the struggling Wendy's hamburger chain.

However, in a letter to Wendy's Chairman James V. Pickett, Peltz said he objected to a so-called standstill clause that would prevent Triarc from launching a hostile takeover bid if the companies did not reach a mutual merger agreement.

Peltz said Triarc had already voiced its objection to the one-year clause but had received no response.

"The lack of response from Wendy's and its advisors and the feedback we are hearing from the market clearly indicate that Wendy's would prefer to sell itself to anyone other than Triarc," read the letter, which was disclosed in a regulatory filing.

Peltz is chairman of Triarc and chief executive of Trian Fund Management. Trian increased its stake in Wendy's to 9.8% from 8.4%, the filing said.

"As we've said before, the special committee of the board will provide comments when they feel it is appropriate," a spokesman for Dublin, Ohio-based Wendy's said.

In addition to Wendy's, Trian has also pushed for changes at consumer-branded companies including Tiffany & Co. and H.J. Heinz Co.

Wendy's, the No. 3 hamburger chain, said in April that it was considering putting itself up for sale after several years of disappointing sales. At the time, Chief Executive Kerrii Anderson said the move to consider a strategic review or sale was driven by the board and was not her decision.

Three Wendy's board members were nominated by Peltz last year. Pressure from Peltz sped up Wendy's spin-off of its Tim Hortons coffeehouse chain and led to the sale of its Baja Fresh Mexican Grill unit to an investment group.

In March of last year, Trian agreed not to increase its stake in Wendy's or propose a takeover or other combination, but that agreement expired last week.

Last month, Wendy's slashed its 2007 earnings forecast and said it would explore a possible sale instead of other options.

After that announcement, Triarc was invited by Wendy's advisor JPMorgan Chase & Co. to participate in the sale process, Peltz said. Triarc learned of the standstill clause June 22, when it received a draft of the confidentiality agreement it would be required to sign to view Wendy's financial information, he added in the letter.

"The board's fiduciary duties require that a synergistic buyer such as Triarc should not be impeded from participating in the sale process," Peltz said.

Wendy's shares rose $1, or 2.7%, to $38.39.

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