Peltz Gets Wendy's for a Song; Now Comes the Tricky Bit

(MoneyWatch)  Early reaction to the takeover of Wendy's International by the particularly active activist investor Norman Peltz, announced Thursday, is coming in.

The Wall Street Journal's Deal Journal blog is reporting that Peltz's Triarc, which owns 9.8 percent of Wendy's, was pushed into closing the deal by a rumored rival bid from Kelso & Co. Triarc heard about the Kelso bid after making a "lowball" offer of $900 million last week, according to the blog.

Nonetheless, at $2.34 billion in stock, Peltz got a great price. After rejecting two earlier bids last summer -- each worth between $3.6 billion and $3.8 billion ?€" Wendy's board, under shareholder pressure and facing a possible proxy battle, relented to the latest offer, which represents a premium of just 5.7 percent based on Wednesday's closing price.

"So," asks the New York Times' Dealbook blog, "are Wendy's shareholders getting burned?"

Yes and no, the blog answers. It's a bargain-basement price, but some shareholders may be happy "considering that the stock was already being supported by expectations of a sale."

Wendy's has struggled since the death in 2002 of founder Dave Thomas. Peltz has been agitating for change ?€" in the form of spinoffs and cost cuts ?€" for more than two years. Wendy's has succumbed to many of his demands, but both earnings and the stock price have continued to lag.

Pam Thomas Farber, daughter of the founder, told the Associated Press that it is "a very sad day for Wendy's, and our family. We just didn't think this would be the outcome." If her father were alive "he would not be amused" by the deal, she said.

Marketwatch, the Wall Street Journal's sister site, said that Triarc, which also own the Arby's fast-food chain, will have a tough time turning Wendy's around, but if "there's anyone qualified to take on the challenge, it's Peltz."

Peltz, Marketwatch notes, is "known as a wizard in the food industry and a fearsome foe in the boardroom."

One of his recent conquests was a major restructuring of H.J. Heinz. He was also instrumental in getting Cadbury Schweppes to split off its U.S. soft drinks business. And he has agitated for Kraft Foods to dump weak brands.