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The Wendy's Company Announces Commencement of $639.0 Million Modified Dutch Auction Tender Offer for Its Common Stock

By: Wendy's |  0 Shares     62 Reads

DUBLIN, Ohio - June 3, 2015 // PRNewswire // - The Wendy's Company (NASDAQ: WEN) announced today that it is commencing a modified "Dutch auction" tender offer to repurchase shares of its common stock for an aggregate purchase price of up to $639.0 million (the "tender offer"). The tender offer is part of an $850 million stock buyback program, which also includes a separate purchase of up to $211.0 million of the Company's common stock from Nelson Peltz, Peter W. May and Edward P. Garden (who are members of the Company's Board of Directors), investment funds managed by Trian Fund Management, L.P. (an investment fund controlled by Messrs. Peltz, May and Garden) and certain of their affiliates (collectively, the "Trian Group").

The Wendy's Company is the world's third largest quick-service hamburger company. The Wendy's system includes more than 6,500 franchise and Company restaurants in the United States and 27 countries and U.S. territories worldwide. For more information, visit aboutwendys.com or wendys.com.

Pursuant to the tender offer, stockholders of the Company may tender all or a portion of their shares (1) at a price specified by the tendering stockholder of not less than $11.05 and not more than $12.25 per share or (2) without specifying a purchase price, in which case their shares will be purchased at the purchase price determined in accordance with the tender offer. When the tender offer expires, the Company will determine the lowest price within the range of prices specified above (the "purchase price") enabling the Company to purchase up to $639.0 million in the aggregate of its common stock. Stockholders will receive the purchase price in cash, subject to applicable withholding and without interest, for shares tendered at prices equal to or less than the purchase price, subject to the conditions of the tender offer, including the provisions relating to proration, "odd lot" priority and conditional tenders in the event that the aggregate cost to purchase all of the shares validly tendered and not validly withdrawn at or below the purchase price exceeds $639.0 million. These provisions are described in the Offer to Purchase and in the Letter of Transmittal relating to the tender offer that will be distributed to stockholders. All shares purchased by the Company will be purchased at the same price. All shares tendered at prices higher than the purchase price will be promptly returned to stockholders.

At the Company's request, to maximize liquidity for other stockholders, avoid impacting the purchase price received by stockholders participating in the tender offer and provide certainty regarding the Trian Group's participation in the stock buyback program, the Trian Group has agreed, under a purchase agreement with the Company, not to tender or sell any of its shares in the tender offer. Under the same agreement, the Company has agreed, following the completion of the tender offer, to purchase from the Trian Group a pro rata amount of its shares (based on the number of shares the Company purchases in the tender offer) at the same price received by stockholders who participate in the tender offer.

The Trian Group, which owns an aggregate of approximately 24.8 percent of the Company's outstanding common stock, intends over the next few months to reduce its ownership position in the Company to between 17 and 19.68 percent through the sale to the Company pursuant to the purchase agreement and through additional sales in the open market and / or privately negotiated transactions. Investors should refer to the Offer to Purchase for the tender offer for additional details regarding the Trian Group's intentions regarding its position in the Company's stock.

The tender offer will not be conditioned upon any minimum number of shares being tendered; however, the tender offer will be subject to a number of other terms and conditions specified in the Offer to Purchase. The tender offer will expire at the end of the day, 12:00 midnight, New York City time, on June 30, 2015, unless extended or terminated by the Company. Tenders of shares must be made prior to the expiration of the tender offer and may be withdrawn at any time prior to the expiration of the tender offer. Stockholders wishing to tender their shares but who are unable to deliver them physically or by book-entry transfer prior to the expiration of the tender offer, or who are unable to make delivery of all required documents to the depositary prior to the expiration of the tender offer, may tender their shares by complying with the procedures set forth in the Offer to Purchase for tendering by notice of guaranteed delivery. Innisfree M&A Incorporated will serve as information agent for the tender offer. Wells Fargo Securities, LLC is serving as dealer manager. American Stock Transfer & Trust Company, LLC is acting as the depositary for the tender offer.

The Company's Board of Directors has authorized the tender offer. However, none of the Company, the Company's Board of Directors, the dealer manager, the information agent or the depositary makes any recommendation to stockholders as to whether to tender or refrain from tendering their shares or as to the price or prices at which stockholders may choose to tender their shares. No person is authorized to make any such recommendation. Stockholders must make their own decision as to whether to tender their shares and, if so, how many shares to tender and the price or prices at which their shares should be tendered. In doing so, stockholders should read carefully the information in, or incorporated by reference in, the Offer to Purchase and in the Letter of Transmittal (as they may be amended or supplemented), including the purposes and effects of the offer. Stockholders are urged to discuss their decisions with their own tax advisors, financial advisors and/or brokers.

News Release for Informational Purposes Only

This news release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any shares of the Company's common stock. The offer is being made solely by the Offer to Purchase and the related Letter of Transmittal, as they may be amended or supplemented. Stockholders and investors are urged to read the Company's tender offer statement on Schedule TO to be filed contemporaneously with the Securities and Exchange Commission (the "SEC") in connection with the tender offer, which will include as exhibits the Offer to Purchase, the related Letter of Transmittal and other offer materials, as well as any amendments or supplements to the Schedule TO when they become available, because they contain important information. Each of these documents will be filed with the SEC, and investors may obtain them for free from the SEC at its website (www.sec.gov) or from Innisfree M&A Incorporated, the information agent for the tender offer, by telephone at: (888) 750-5834 (toll-free), or in writing to: 501 Madison Avenue, 20th Floor, New York, New York 10022.

Forward-Looking Statements

This news release contains certain statements that are not historical facts, including, most importantly, information concerning possible or assumed future results of operations of The Wendy's Company and its subsidiaries (collectively, the "Company"). Those statements, as well as statements preceded by, followed by, or that include the words "may," "believes," "plans," "expects," "anticipates," or the negation thereof, or similar expressions, constitute "forward-looking statements." In addition, all statements that address future operating, financial or business performance; strategies, initiatives or expectations; future synergies, efficiencies or overhead savings; anticipated costs or charges; future capitalization; and anticipated financial impacts of recent or pending transactions are forward-looking statements. The forward-looking statements are based on the Company's expectations at the time, speak only as of the dates they are made and are susceptible to a number of risks, uncertainties and other factors. The Company's actual results, performance and achievements may differ materially from any future results, performance or achievements expressed in or implied by the forward-looking statements.

Many important factors could affect future results and could cause those results to differ materially from those expressed in or implied by the forward-looking statements. Such factors, all of which are difficult or impossible to predict accurately, and many of which are beyond the Company's control, include, but are not limited to:

• (1) changes in the quick-service restaurant industry, such as consumer trends toward value-oriented products and promotions or toward consuming fewer meals away from home;
• (2) prevailing economic, market and business conditions affecting the Company, including competition from other food service providers, high unemployment and decreased consumer spending levels;
• (3) the ability to effectively manage the acquisition and disposition of restaurants;
• (4) cost and availability of capital;
• (5) cost fluctuations associated with food, supplies, energy, fuel, distribution or labor;
• (6) the financial condition of the Company's franchisees;
• (7) food safety events, including instances of food-borne illness involving the Company or its supply chain;
• (8) conditions beyond the Company's control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting the Company's customers or food supplies, or acts of war or terrorism, or security breaches of the Company's computer systems;
• (9) the effects of negative publicity that can occur from increased use of social media;
• (10) the availability of suitable locations and terms for the development of new restaurants;
• (11) risks associated with the Image Activation program;
• (12) adoption of new, or changes in, laws, regulations or accounting policies and practices;
• (13) changes in debt, equity and securities markets;
• (14) goodwill and long-lived asset impairments;
• (15) changes in interest rates;
• (16) the difficulty in predicting the ultimate costs associated with the sale of Company-operated restaurants to franchisees, employee termination costs, the timing of payments made and received, the results of negotiations with landlords, the impact of the sale of restaurants on ongoing operations, any tax impact from the sale of restaurants and the future impact to the Company's earnings, restaurant operating margins, cash flow and depreciation;
• (17) the difficulty in predicting the ultimate costs that will be incurred in connection with the Company's plan to reduce its general and administrative expense, and the future impact on the Company's earnings;
• (18) risks associated with the Company's recent securitization financing and recapitalization, including the ability to generate sufficient cash flow to meet increased debt service obligations, compliance with operational and financial covenants, and restrictions on the Company's ability to raise additional capital;
• (19) risks relating to stock repurchase programs approved by the Board of Directors, including the program announced on June 3, 2015 to repurchase up to $1.4 billion in aggregate purchase price of our outstanding common stock through the end of 2016; and
• (20) other factors cited in the Company's news releases, public statements and/or filings with the Securities and Exchange Commission, including those identified in the "Risk Factors" sections of the Company's Forms 10-K and 10-Q.

The Company's franchisees are independent third parties that the Company does not control. Numerous factors beyond the control of the Company and its franchisees may affect new restaurant openings. Accordingly, there can be no assurance that commitments under development agreements with franchisees will result in new restaurant openings. In addition, numerous factors beyond the control of the Company and its franchisees may affect franchisees' ability to reimage existing restaurants in accordance with the Company's expectations. All future written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict these events or their impact.

The Company assumes no obligation to update forward-looking statements as a result of new information, future events or developments, except as required by federal securities laws. The Company does not endorse any projections regarding future performance that may be made by third parties.

About The Wendy's Company

The Wendy's Company is the world's third-largest quick-service hamburger company. The Wendy's system includes approximately 6,500 franchise and Company-operated restaurants in the United States and 28 countries and U.S. territories worldwide. For more information, visit aboutwendys.com.

SOURCE The Wendy's Company

Investor Contacts:

David D. Poplar
Vice President of Investor Relations
(614) 764-3311
david.poplar@wendys.com

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