Wendy’s may sell its underperforming Baja Fresh chain, according to a press release issued by the company today.
The release also announced that Wendy’s International, Inc. and Trian Fund Management, L.P., on behalf of investment funds and accounts managed by it (“Trian Partners”), reached an agreement, by which Wendy’s will expand its board of directors from 12 to 15 members and add three new directors nominated by Trian Partners: Jerry W. Levin, Peter H. Rothschild and Stuart I. Oran.
The three new directors will join the Board on March 6, 2006, and will be spread evenly across Wendy’s three classes.
“We welcome these new directors to our board and look forward to working with them to enhance long-term shareholder value,” said Chairman and Chief Executive Officer Jack Schuessler.
The expanded board reflects an agreement between the Company and Trian Partners, as well as Sandell Asset Management Corp. and investment funds and accounts managed by it, under which they have agreed to vote their shares in favor of the Company’s director nominees at Wendy’s April 27, 2006, annual meeting. Trian and Sandell also made certain other commitments.
In addition, Wendy’s Board of Directors said that it plans the following actions to increase Wendy’s shareholder value:
— Complete the initial public offering of Tim Hortons(R), and spin off its remaining shares no later than December 31, 2006.
— Following the initial public offering of Tim Hortons, examine ways to return excess cash to shareholders, including share repurchases or dividends, and the appropriate timing thereof.
— Consistent with Wendy’s recently announced “3-Year Combo Plan,” continue to focus on improving operating profit margins at Wendy’s.
— Explore strategic alternatives for its Baja Fresh business.
“We are focused on growing revenues and improving profitability at the core Wendy’s brand,” said Schuessler. “We have an outstanding track record of leadership and innovation in the quick service restaurant sector and look forward to regaining that position,” said Schuessler.
“We are excited that the new directors will work with the board to further enhance shareholder value at Wendy’s,” said Nelson Peltz of Trian Partners. “We are now highly supportive of Wendy’s management team and their initiatives, and we believe that these new board members will contribute to Wendy’s plan to improve its profitability.”