DOW JONES NEWSWIRES
Nelson Peltz's Trian Partners LP, concerned after Wendy's International Inc. (NYSE:WEN) ( WEN) rejected two business combinations, said in a letter Friday that it intends to contact shareholders directly to hold a special meeting at which they can decide 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) and 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."
Wendy's (NYSE:WEN) officials couldn't immediately be reached for comment.
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.
Wendy's U.S. sales have been weak as the company has struggled with a slew of unpopular menu items. Same-store sales fell 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 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 (NYSE:CSG) (CSG) and Wendy's International Inc. (NYSE:WEN) (WEN). 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) closed Thursday at $25.10, and there was no premarket trading.
-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com
(END) Dow Jones Newswires 04-18-08 0929 Copyright (c) 2008 Dow Jones & Company, Inc.
