Archive photo: A hamburger and fries, not identified as Wendy’s products. Shameel mukkath/Pexels (cropped)
A group led by Trian Fund Management and Flynn Group has submitted a non-binding proposal to take Wendy’s private for $7.35 per share in cash, according to a securities filing Wednesday.
The group, working with BlueFive Capital and Sixth Street Partners, proposed buying the shares not already beneficially owned by the filing shareholders. The offer price represents an approximately 20% premium to Wendy’s closing share price October 27, the group said in Item 4 of its amended Schedule 13D filed with the SEC.
A proposal, not an agreed acquisition
The filing describes the proposal as an expression of interest only. Any transaction would require negotiation and execution of mutually acceptable definitive documents, and the group warned there is no assurance an agreement will be reached or a transaction completed.
The bidders reserved the right to change or withdraw their proposal at any time, with or without prior notice. They said they expected a special committee of independent, disinterested Wendy’s directors to consider the proposal and make a recommendation to the board.
Equity funding and a shareholder rollover
Trian and its affiliated funds and related parties beneficially own approximately 16.25% of Wendy’s outstanding common stock, according to the filing. The proposed financing combines equity from the investor group and other investors with a rollover of shares held by the filing shareholders.
The bidders said they expected to deliver executed equity-commitment letters when definitive transaction agreements are signed. Those equity-financing arrangements remain under negotiation, and the filing says acceptable financing is not assured.
The group said the proposed transaction would not require new debt or be subject to a financing condition. It expects Wendy’s existing securitization financing to remain in place if a transaction closes. Those are terms of the proposal, not a statement that funding has been completed.
Private ownership pitched as a turnaround path
The bidders argued that private ownership would provide longer-term capital while Wendy’s manages approaching debt maturities and the investment needed for the brand. That is the investor group’s case for the proposal, not a commitment by Wendy’s to accept it.
Trian and Flynn also entered a cooperation agreement governing their work on the proposal and the allocation of costs and responsibilities, the filing said.
JBizNews Desk | New York
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