Arby's Swallows Up Wendy's

Roast Beef Sandwich Chain Buys Square Burger Biz For $2 Billion

(AP)  After two past rejections, the owner of Arby's shaved roast beef sandwich restaurants is buying Wendy's, the fast-food chain famous for its made-to-order square hamburgers and chocolate Frosty dessert, for around $2 billion.

Triarc Companies Inc., which is owned by billionaire investor Nelson Peltz, said Thursday 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.

Thomas' daughter Pam Thomas Farber said the family was 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 Farber, 53.

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

Thomas became a household face when he began pitching his burgers and fries in television commercials in 1989.

Wendy's International Inc. deferred comment to Triarc, which had nothing further to say right away.

Triarc will pay about $26.78 per share for the company, which has about 87 million shares outstanding. The price is a premium of 6 percent from the company's closing price of $25.32 Wednesday.

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

Atlanta-based 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.

The Wendy's board has been studying strategic alternatives since early last year, and expenses related to that contributed to the company's 72 percent drop in first-quarter earning announced Thursday.

Wendy's said its profits totaled $4.1 million, or 5 cents, a share for the quarter ended March 30 compared with a profit of $14.7 million, or 15 cents a share, a year ago. Revenue was down slightly to $513 million from $522 million a year ago.

Wendy's stock is well off its high for the past year of $42.22 that it reached shortly after the committee began its work in the summer. It fell 3 cents to $25.39 in early trading Thursday.

Sales have slid in a struggling economy that has hurt other restaurant chains, too.

The deal caps two chaotic years for Wendy's in which it has sold or spun off operations, slashed its corporate staff and had its wholesome image tarnished by a woman who falsely claimed she found part of a finger in her chili.

Triarc said it will also change its name to include the Wendy's name.

Pushed by activist shareholders, Wendy's spun off its Tim Hortons coffee-and-doughnut chain and sold its money-losing Baja Fresh Mexican Grill. Chairman and CEO Jack Schuessler abruptly retired in March 2006, months after a woman and her husband were sentenced to prison for extortion for their plot in March 2005 to plant part of a human finger in a bowl of chili at a San Jose, Calif., Wendy's restaurant and claiming it was served to her.

Farber said the family didn't think much of Peltz' and Triarc's tactics.

"They came after them (Wendy's) and came after them and came after them. They spun Tim Hortons off, they did this, they did that. They did everything they asked but it wasn't enough."

Farber said she had just gotten off the phone with her sister Wendy, 46, the company's namesake.

"She's feeling horrible. She just is devastated," Farber said.

Farber said the family had a supported an alternate bid led by Wendy's franchisee David Karam, president of Cedar Enterprises Inc.

"We knew what Dave Karam's commitment was to Wendy's, his family's commitment — just as ours. His dad was a very good friend of our dad's and was one of the very first franchisees, so there's a lot of history."

Peltz, who runs the Trian Fund, and his allies own 9.8 percent of Wendy's stock. Arby's has more than 3,000 restaurants.

He had argued in a letter to Wendy's chairman James Pickett that Triac would be a natural buyer of Wendy's. Peltz gained three seats on the company's board last year.

Thomas, who died in 2002, opened his first restaurant in a former steakhouse on a cold, snowy Saturday in downtown Columbus on Nov. 15, 1969. He named the chain after his 8-year-old daughter Melinda Lou — nicknamed Wendy by her siblings.

The smiling Thomas, always wearing a white short-sleeved shirt and red tie, touted the virtues of fast food in humorous ads, often featuring big-name stars such as bluesman B.B. King and soap opera queen Susan Lucci. He appeared in more than 800 ads.

Wendy's, based in suburban Dublin, operates about 6,600 restaurants in the United States and abroad. It trails McDonald's and Burger King Holdings Inc. in the burger business.

[naucoming4u]

WHERE''S THE (roast)BEEF!

[naucoming4u]

No thanks not for a single person.

Posted by lewiston14 at 08:07 AM : Apr 25, 2008
..............

Yep, eating healthy (cooking at home) for a working single person is extremely challenging!

You not only have to work harder and more hours to make enough to survive on your own, but then you are so tired that spending an hour in the kitchen to cook a truly home-made "healthy" meal is just NOT practical. So folks like us have to rely on the "quick and easy" meals in a package or some semblance of a "healthy" meal at a fast food restaurant.

Living the single life is definitely a unique challenge, for both men and women, and I have not seen/heard any "dietitians" and other "certified" health gurus that understand this challenge. Especially when it comes to eating a healthy diet!

[eferrell1]

They deserve each other. I hate Arby''s and Wendy''s!

[ov442]

Well at least we know Arby''s swallows.

[lewiston14]

John Im dibetic also. I mentioned I have not been to a fast food place in a year. I go out of my way not to have anything that has sugar or at least alot of it. I cant even eat an orange. Do a few cans of diet soda and lots of ice water. I liked salads but as I got older they got hard for me to eat. And how many chickens can I eat in a year. LOL

[tail_honcho]

We have a very good Wendy''s right outside of work. They are clean, economical and food seems to be done just right all the time. I visit it about once a week and really appreciate the fact that I can get a fairly healthy chicken sandwich and chili or baked potato instead of fries. Been doing this for many-many years, I really hope this take-over does not ruin Wendy''s. It''s the risk you run when you take your company public (my brother is facing similar problems with his once private - now public company).

[johnstossel]

This sucks. I have diabetes and prefer to have salad instead of fries as a side dish. At Wendy''s you can replace fries on those meal deals with a salad or chili. At Mickey D''s I tried this and they said I would have to pay extra. I told them that next time I was going to go to Wendy''s. Now that they have become part of a homogenized mass I hope I can still do this,

[lewiston14]

I understand what your saying. Baked chicken ok that easy, Chicken salad and pot pies, now you made me go out to buy flour, pot pie tins, carrots, onions, mayo, potatoes and lord knows what eles. And I get the bonus of heating up the oven 5 times. You dont get much out of a $5 chicken except a half pan of grease and there is no such thing as a $2 bag of potatoes around here. Plus all the time and mess to clean up. No thanks not for a single person.

[mythoughtsr]

I just read more posts and before anybody calls me fat im 6''''2" and come in at 180. I dont spend my entire life in these places actually have not been to any of the in a year but cooking for one person just dont make sense. I dont like spending $1.69 for a single orange or $1 for a single cucumber $2 for lettuce that may or may not have ecoli. Tonight its going to be a fish fry that comes with enough fries to eat the entire weekend as long as I have my ketchup.

Posted by lewiston14

If you think that cooking for one doesn''t make sense you couldn''t be more wrong about it. You can take one $5.00 chicken, cook it and get lots of meals out of it. You can have baked chicken one night, chicken salad, individual chicken pot pies and any amount of it can be frozen into individual servings. You can get 4-5+ meals out of a chicken. People don''t want to take the EFFORT to prepare it though. So, they buy expensive, salt and fat laden meals. It doesn''t make any sense. Instead of fries, buy a bag of potatoes for two dollars and sautee'' them in a slight bit of olive oil with sea salt. I don''t understand why people complain about prices of fresh food and then spend on fast food garbage.

[lewiston14]

I just read more posts and before anybody calls me fat im 6''2" and come in at 180. I dont spend my entire life in these places actually have not been to any of the in a year but cooking for one person just dont make sense. I dont like spending $1.69 for a single orange or $1 for a single cucumber $2 for lettuce that may or may not have ecoli. Tonight its going to be a fish fry that comes with enough fries to eat the entire weekend as long as I have my ketchup.

[lewiston14]

Im not a fan of wendys. I went there once and sat on the john for 2 days. I am a fan of Arbys. Yes I know its chopped up recompressed something but it taste good and their fries are good to. I wont go near a mac d''s but I like Burgerking. Taco bell rocks. Anything that comes out of a caucking gun has to be good.

[haoli25]

Arby''s is going to have a tough time getting their ''horsemeat'' in square patties.

[brianbwb-2009]

Outside the US, Wendy''s enjoys a good reputation, their food seems a little less "mass produced" than say, Mc Donald''s. A bit more expensive, it, along with Carl''s Jr., pulls a more upscale crowd.

I do sometimes miss the "old" Arby''s, a cheap roast beef sandwich was much more satisfying than a Big Mac. Times change, and ruthless efficiency may have diminished Arby''s QC, but it would be interesting if Arby''s menu was available outside the US.

[guest173]

maybe they are copying the KFC-Tacobell model. I like having more options. I hope the prices are reasonable enough, even though I haven''t eaten at either Arby''s or Wendy''s in a long time, maybe if they get Jackin the Box with them, I''ll eat there once in a while

[isabel36-2009]

Not sure what ''watcher269'' is referring to but Wendy''s has the best square burgers around and very healthy since they are seved with mustard (no mayo) and lettuce/tomato and nothing else, not greasy - good for the kids!!!!!

[tryhonesty]

Well, I guess the prices are going up at Wendy''s. This take over should have been reversed...too bad.
Arby''s has the highest prices of any fast food chain.

[isabel36-2009]

I prefer a pimple to the''runs'' from Arby''s!

[vancouverboo]

I always get a pimple on my face when I eat a Wendy''s burger. They can''t be any good for you.

[ontheleft]

Arby''s is a trashy chain restaurant. Expect Wendy''s to go downhill under their leadership.

[keithle1]

McDonald''s burgers are AWFUL. I like Burger King & Wendys burgers. Sometimes a man needs a lot of fat & calories. Don''t worry. You''ll be skinny when you die.

I''m surprised they didn''t mention the famous "Where''s The Beef" commercial.