(Adds comments from Wendy's (NYSE:WEN) chairman, updates stock price)
DOW JONES NEWSWIRES
Nelson Peltz's Trian Partners LP said that Wendy's International Inc. (NYSE:WEN) (WEN) rejected two proposed mergers or takeovers and that Trian intends to contact shareholders directly to hold a special meeting on the hamburger chain's future.
"Trian is very concerned about the current direction of Wendy's (NYSE:WEN) ," Trian President Peter May wrote to Wendy's Chairman James Pickett.
On Thursday, according to the letter, Trian and Triarc Cos (NYSE:TRY) . (TRY) were informed that a board committee rejected separate proposals, one about merging Wendy's (NYSE:WEN) with Triarc's Arby's fast-food chain and the other about Wendy's (NYSE:WEN) being acquired for more than $900 million in cash plus stock. "Our most recent proposals were summarily rejected in less than 24 hours," May wrote.
At this point, May said that, whatever deal the Wendy's (NYSE:WEN) committee does approve, it should be subject to shareholder vote and that holders "be fully updated on the current financial condition of the company - including sales, profits and margins."
A Wendy's (NYSE:WEN) statement said, "The company has no comment at this time, nor are we going to engage in speculation."
But Pickett didn't hold back, calling May's comments "misleading" and said he was being misleading about not mentioning a newly formed special purpose acquisition vehicle created by Trian. SPACs are entities that go public without operations with the intent of launching takeovers.
Pickett, who denied May's contention that the Trian offers were "summarily" rejected, added that a merger of Arby's and Wendy's (NYSE:WEN) would give Wendy's (NYSE:WEN) a value that would be "significantly below a level we had previously told you very clearly would be unacceptable."
Wendy's (NYSE:WEN) has been mulling a sale of itself for a year, but the main contender to buy it, Triarc, lowered its offer price. Some have seen the effort by Peltz to take control of the company's board through Trian as a sign he was preparing for an alternative to outright ownership.
Pickett said in his letter to May that recommendations regarding the strategic review should be announced "in the very near future."
Wendy's U.S. sales have been weak of late, with same-store sales down 1.6% in the first quarter at company-owned restaurants and 0.1% at franchised locations.
Peltz and his partners traditionally look for businesses that have strong cash flow but which, in their opinion, have been undermanaged. Their strategy typically involves cutting costs and focusing on the strongest parts of the business. Peltz's group has invested in several food companies, including Cadbury Schweppes PLC (CSG) and Kraft Foods Inc. (NYSE:KFT) (KFT). They also hold stakes in Chemtura Corp. (NYSE:CEM) (CEM), a specialty chemical company, and luxury retailer Tiffany & Co. (NYSE:TIF) (TIF).
Shares of Wendy's (NYSE:WEN) were recently up 30 cents at $25.40.
-By Kevin Kingsbury and Mike Barris, Dow Jones Newswires; 201-938-2136; kevin.kingsbury@dowjones.com
(END) Dow Jones Newswires 04-18-08 1506 Copyright (c) 2008 Dow Jones & Company, Inc.
