Triarc Activist Peltz Attacks Wendy's Sale Process

Nelson Peltz's Triarc Cos. contended Tuesday that Wendy's is trying to block it from participating in Wendy's sale process, despite it being a "natural, strategic buyer" of the chain.In a letter to Wendy's dated July 3 and filed with the SEC (in which Triarc also disclosed it upped its Wendy's stake from 8.4% to 9.8%), Peltz said Triarc had been invited to participate in the sale process, but contended that the confidentiality agreement accompanying the invitation contained a "restrictive one-year standstill clause to which Triarc has objected... The feedback we are hearing from the market clearly indicate that Wendy's would prefer to sell itself to anyone other than Triarc," he said. A previous standstill clause expired June 30, and Peltz, it appears, has no desire to be drawn into another. A Wendy's spokesman had no comment. In the letter, Triarc said its strategies might include shareholder participation in a bid by Triarc to acquire Wendy's either through the company's sale process or otherwise. UBS analyst David Palmer wrote in a research note that the letter may be an attempt to boost Wendy's share price, and is not necessarily an indication he wants to buy the company: "We believe Trian (owner of Triarc) is more likely interested in pushing for a competitive bidding process and a timely sale of the company as a liquidity event to sell its shares." It is also possible Peltz wants to bring together Wendy's and Triarc-owned Arby's.

Sources: Wall Street Journal, Dow Jones, Bloomberg
Commentary: Wendy's International: Peltz Wants His Triarc Unit to Participate in Sale Process • A Final Word On Wendy's • Citigroup: Wendy's Turnaround Appears On Track
Stocks/ETFs to watch: Wendy's International Inc. (WEN), Triarc Companies Inc. (TRY). Competitors: Applebee's International Inc. (APPB) [also on the auction block], McDonald's Corp. (MCD), Yum! Brands Inc. (YUM), Burger King Corp. (BKC). ETFs: PowerShares Dynamic Leisure & Entertainment ETF (PEJ), Rydex S&P Equal Weight Consumer Discretionary ETF (RCD), PowerShares Dynamic Food & Beverage (PBJ)
Conference call transcript: Wendy's Q1 2007

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