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Wendy's franchise owner plans to make bid for chain

September 27, 2007|From the Associated Press

COLUMBUS, OHIO — The owner of 134 Wendy's restaurants wants to bid for the nation's No. 3 hamburger chain with two private equity firms.

David Karam, president of Cedar Enterprises Inc., said Wednesday that he and his partners had been invited by Wendy's International Inc. to a second round of talks. He is backed by Kelso & Co. and Oak Hill Capital Partners.

"I've been involved in the brand," he said. "I see the great potential of it."

Cedar Enterprises, based outside Columbus, owns Wendy's restaurants across the country that have combined annual revenue of $200 million.

Karam's first-round proposal was enough to garner entry into a second round next month, where bids are expected. He would not disclose how much he is willing to pay for Wendy's.

Wendy's shares rose 57 cents to $33.63.

Billionaire investor Nelson Peltz has said his company, Triarc Cos., is prepared to offer $37 to $41 a share for Wendy's in a deal that would peg Wendy's value at $3.2 billion to $3.6 billion. Triarc owns the fast-food chain Arby's and is a major Wendy's shareholder.

Peltz said in July that he and his allies had increased their Wendy's stake to 9.8% of outstanding shares.

Wendy's formed a committee in April to determine how best to boost its stock price, including a possible sale. Wendy's spokesman Denny Lynch and Peltz's spokeswoman Carrie Bloom declined to comment Wednesday.

Wendy's, based in Dublin, Ohio, operates about 6,600 restaurants in the U.S. and abroad. It trails rivals McDonald's and Burger King.

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