Chalk up another victim of the evaporation of cheap credit. Yesterday Nelson Pelz's Triarc Co., the front runner in the race to buy Wendy's International (NYSE: WEN), announced it had offered $37-$41 per share, well below the price it was prepared to pay last summer when its interest was first revealed.Another factor suppressing the price is word in The Wall Street Journal (subscription required) earlier this week that another suitor, William Foley, along with several investment funds, had decided to pass on the opportunity. This leaves only one known competitor for the company, David Karam's Cedar Enterprises, which owns 134 Wendy's restaurants.
Apparently, Pelz was not enthralled by the company's slightly better than expected third quarter, or perhaps he took to heart Wendy's CEO Kerrii Anderson's concern that the "headwinds" of rising commodity prices could hamper the company's ongoing cost reduction initiative.
After a burst of market enthusiasm over the sale possibility drove Wendy's stock as high as 42.22 this summer, it has dropped again to the doldrums of the low $30's. It fell further on today's news.
Reader Comments (Page 1 of 1)
11-14-2007 @ 4:35PM
Michael Schneider said...
There has been some discussion in the media that Nelson Peltz is a tough negotiator and this is just a step in the process where he may still pay the original price in the end. I don't know if that is what he is doing but often investors can make money by following Nelson Peltz- but not always. For those interested there is an item about the performance of stocks after Nelson Peltz invests as well as other items about Nelson Peltz in the Billionaire Watch section (yellow label, top) at http://www.Barrelomoney.com.
11-23-2007 @ 5:26PM
Dan said...
Everyone knows that private equity is going to ruin the current turnaround that has resulted in 5 consecutive quarters of positive same store growth. More importantly, when will Wendy’s special committee stop entertaining the idea of bringing a whole new strategy to the table that would not only wipe out the progress that is already underway, but would completely erase the Wendy’s culture that Dave Thomas worked so hard to instill in his company?
Even with the turmoil that Peltz and the special committee created, Kerrii Anderson and her team are still moving the ball forward, I can only imagine what they could accomplish if they weren’t having to deal with this mess. I think the special committee should move on and give the current strategic plan a chance.
Nelson Peltz is bad for Wendy's, crisis is around the corner if he has his way.
Check out this article, it is a great analysis:
Kerrii Anderson: Taking Care of Business
http://knowledge.wpcarey.asu.edu/index.cfm?fa=viewArticle&id=1505