Following up on our exclusive, breaking, 13D news insight, we now bring you the news that after sufficient sacrifice on the activist altar, Wendy’s antagonist is, for the moment, appeased.
You can’t really blame Wendy’s for being a reluctant target. At one time the firm was expecting as much as $4 billion cash offers from potential suitors. Trian and Triarc (Peltz’ hedge funds) were offering just $900 million in cash and the rest in stock, or a combination with Arby’s.
Wendy’s to Unveil Deal With Peltz [WSJ]
Nelson Is Angry [DealBreaker]
Activists
In July of 2005, “Endeavor Acquisition Corporation (A Development Stage Enterprise) was formed in Delaware. Just before Christmas 2005, the company raised around $130 million in a “blank check” IPO, as a “Special Purpose Acquisition Company,” effectively a promise to go buy something worth owning, eventually.
The thing about SPACs is that they don’t generally start with an investment in mind, and they have particular restrictions on how long they can spend looking. In some cases, management must pay the fees paid out by the SPAC if it liquidates. This can get pricey. Think $1 million and above. In this case, Endeavor had 18 months from the “consummation” of the IPO to sign a letter of intent. After that, it was required to liquidate.
Said the firms filings:
Our efforts in identifying a prospective target business will not be limited to a particular industry, although we intend to focus on service businesses in one of the following segments:
• business services;
• marketing services;
• consumer services;
• health care services; and
• distribution services.
They had about 6 months left when they filed an 8-K announcing their intention to acquire American Apparel, “a leading provider of cotton leisure wear geared toward contemporary metropolitan adults and sold through company-owned retail locations and online,” which I suppose might have been termed a “distribution service company,” after a long night in Tijuana.
Presented without Comment:
April 18, 2008
Mr. James V. Pickett
Chairman of the Board
Wendy’s International, Inc.
4288 West Dublin-Granville Road
Dublin, Ohio 43017-0256
Dear Jim:
I am writing to you in my capacities as President of Trian Fund Management, L.P. and Vice Chairman of Triarc Companies, Inc.
As a large shareholder of Wendy’s, Trian is very concerned about the current direction of Wendy’s. On April 17, 2008, Trian and Triarc were informed that the Wendy’s special committee had rejected two acquisition proposals made by Trian and Triarc. One proposal called for the combination of Wendy’s and Arby’s while the other involved an acquisition of 100% of Wendy’s for over $900 million in cash with the balance in stock. 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. Our most recent proposals were summarily rejected in less than 24 hours.
