Wendy's/Arby's to sell Arby's to Roark Capital for $130 million
(Reuters) - Wendy's/Arby's Group Inc WEN.N said it will sell a majority stake in its struggling roast beef sandwich chain, Arby's Restaurant Group Inc, to private equity firm Roark Capital Group for about $130 million in cash.
The third-biggest U.S. fast-food restaurant operator has been grappling with rising costs of commodities like beef, bacon, fryer oil and dairy.
Wendy's/Arby's has also struggled with rising competition from rivals like McDonald's Corp (MCD.N) and Yum Brands Inc (YUM.N), which have larger international exposure.
In January, the company said it plans to sell its Arby's business to focus on the Wendy's hamburger business.
Roark also committed to invest in Arby's, under certain circumstances, an additional $50 million through 2013 for preferred stock in return.
Wendy's/Arby's will retain 18.5 percent ownership of Arby's valued at about $30 million, it said in a statement.
With the transaction, Wendy's/Arby's Group said it will also get an income tax benefit of about $80 million that the company expects to realize over the next few years.
Roark Capital will also assume about $190 million in debt.
The two fast-food chains were combined in 2008 when billionaire investor Nelson Peltz's Triarc Cos, Arby's then parent, bought Wendy's for $2.2 billion to create the world's third-largest publicly held fast-food chain.
(Reporting by Arpita Mukherjee in Bangalore; Editing by Don Sebastian)
- PepsiCo Inc reported a higher-than-expected quarterly profit and raised its full-year adjusted earnings forecast, helped by strong sales of snacks such as Lays and Doritos chips in North America.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.