Wendy's sells stake in Arby's owner for $450 million

A Wendy's Co restaurant is pictured in Monrovia, California November 4, 2015. REUTERS/Mario Anzuoni

(Reuters) - Hamburger company Wendy's Co WEN.O ended its decade-old ties with Arby's as it sold its 12.3 percent stake in the sandwich chain's parent for $450 million on Thursday, giving it a boost as it battles larger rivals McDonald's and Burger King.

Wendy’s will sell its stake to Inspire Brands, owned by Roark Capital, at a price 38 percent higher than its most recent valuation of the investment, Wendy’s Chairman Nelson Peltz said in a statement.

The company also approved a new $100 million share buyback program.

Wendy’s shares rose 2.8 percent in early trading, hitting their highest level in over a decade.

Peltz bought struggling Wendy’s in 2008 for $2.3 billion through Triarc Cos Inc, which also owned Arby’s at the time, and formed Wendy’s/Arby’s Group Inc.

Wendy’s/Arby’s sold Arby’s in 2011 to hedge fund Roark Capital for about for about $130 million, retaining an 18.5 percent stake worth about $30 million at the time.

The stake got diluted to 12.3 percent after Arby’s bought Buffalo Wild Wings Inc earlier this year, following which a holding company, Inspire Brands, was formed.

Inspire’s portfolio includes more than 4,600 Arby’s, Buffalo Wild Wings and R Taco locations worldwide.

Reporting by Uday Sampath in Bengaluru; Editing by Sai Sachin Ravikumar