The recent death of Billy Milligan has people once again talking about multiple-personality syndrome.
Arby’s Owner to Buy Wendy’s
Listen to the Story
Since the death of founder Dave Thomas in 2002, Dublin-based Wendy’s has been in a slump. Thursday the owner of Arby’s, Triac Companies, announced it is buying the nation’s number three hamburger chain. WOSU spoke with a food service expert to find out what this means for the company.
Triarc Companies saids it’s buying Wendy’s in an all-stock deal. Triarc, run by billionaire investor Nelson Peltz, has been trying to purchase the under-performing hamburger chain for about two years.
Triarc is offering Wendy’s shareholders 4.25 shares of its Class A stock for every Wendy’s share they own. The deal was approved by both Wendy’s and Arby’s boards of directors.
Neither Triarc nor Wendy’s would comment outside a press release. The two companies said the combination of Wendy’s and Arby’s will created a powerful restaurant company and a must own restaurant stock.
Dennis Lombardi is a food service expert based in Columbus. Lombardi said troubled fast food hamburger chains are nothing new. He said three years ago Burger King was having problems and three years before that it was McDonald’s. But Lombardi said both McDonald’s and BK have successfully turned around operations. And he does not think Wendy’s is an exception.
“Both McDonald’s and Burger King have turned their brands around. McDonald’s in a spectacular fashion and Burger King, certainly, in a respectable fashion. I fully anticipate with or without the merger Wendy’s would have done the same thing in another probably six months to a year,” Lombardi said.
So what does the merger mean for Wendy’s employees? Triarc said Arby’s and Wendy’s will operate under their current brands with their headquarters staying in Atlanta and Dublin, respectively. Lombardi does not predict widespread layoffs. But he said that’s going to depend how self-contained the companies remain.
“I think the key question is how they define autonomy. I think if it’s complete and total autonomy then you probably won’t see much in the way of layoff at all. If you’re talking about autonomy just in the way the brand is perceived by the consumer there’s a possibility that at some point down the road they may want to consolidate some back of the house function whether it be accounting or something of that nature,” Lombardi said.
Triarc head Nelson Peltz, is known for buying businesses, turning them around and then selling them for a huge profit. Peltz bought the beverage company Snapple in 1997 for $300 million. A couple of years later he sold it for almost $1.5 billion, five times what he paid for it. Will Peltz do something similar to Wendy’s?
“Well I think he’s certainly going to try. He believes, and certainly his advisers would be agreeing with him, that there is potential to increase the value of the brand substantially. I think that’s the motivating factor behind all of this,” he said.
Lombardi said there is an upside to the merger. He said management teams will now be able to focus on the brand rather than an impending sale.
In an interview with the Associated Press, Dave Thomas’s daughter, Pam Farber said she is not happy with the merger.
Wendy’s stock ended the day up – about 4.25 percent.