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Wendys rejects two bids from activist Peltzs firms

Date: Monday, April 21, 2008
Author: Polya Lesova, MarketWatch.com

NEW YORK (MarketWatch) -- Wendy's International Inc. has rejected two acquisition proposals from firms headed by activist investor Nelson Peltz, according to filings Friday with the Securities and Exchange Commission.
Wendy's declined the two bids advanced by Triarc Companiesparent of Arby's Restaurant Group, and hedge fund Trian Fund Management, L.P.
The first proposal called for the combination of Wendy's and Arby's, while the second involved an acquisition of 100% of Wendy's for over $900 million in cash and stock.
Last April, the Dublin, Ohio-based fast-food company said it was looking at ways to boost its share price, including a possible sale or strategic change. Buyout rumors circulated throughout the year, with the highest-profile potential buyer being Peltz's Triarc.
Peltz is chairman of Triarc as well as CEO and founding partner of Trian.
The latest offers were described in a letter sent Friday from Peter May, vice chairman of Triarc and president of Trian, to Wendy's Chairman James Pickett.
May said that as a large shareholder of Wendy's, Trian is "very concerned" about the company's direction.
"Our proposals would have required the approval of the shareholders on each side of the transaction, and neither of the proposals was conditioned on the receipt of third-party financing," May said. "Our most recent proposals were summarily rejected in less than 24 hours."
In a response letter to May, also dated Friday and cited in a Wendy's SEC filing, Pickett said that he can't "allow further misleading statements to go unaddressed."
"Over the nearly nine months since you first publicly announced your interest in buying Wendy's for up to $41 per share, your private actions and public statements have been inconsistent," Pickett wrote in the letter to May.
In the proposal to combine Wendy's and Arby's, the value ascribed to Wendy's was "significantly below a level we had previously told you very clearly would be unacceptable," Pickett wrote.
Pickett also said that May didn't disclose the role of Trian I Acquisition Corp., a recently formed special purpose acquisition company involved in the proposals made to Wendy's. Pickett said that "not disclosing the role of the SPAC leaves our shareholders with a very misleading picture."
"The timing of the rejection of your latest proposals is attributable to their inadequacy and to our strong belief that our shareholders need to have the Special Committee process concluded," Pickett wrote.
Wendy's is expected to report its quarterly earnings Friday before the market opens. End of Story
Polya Lesova is a MarketWatch reporter based in New York