Wendy’s International Inc. said yesterday it is exploring the possible sale of the company rather than looking at other restructuring options.
The recommendation comes after a nearly two-month review from a special committee of the company’s board of directors.
Wendy’s in April said it would weigh a variety of options, including a possible sale, to boost strategic value (Promo Xtra, April 27, 2007).
The No. 3 hamburger chain hired JPMorgan and Lehman Bros. as its financial advisers to explore a possible sale. There is no timetable for the process, the company said.
“The special committee has determined that the exploration of a sale is the appropriate next step in the investigation of value-creating alternatives for our stakeholders,” James V. Pickett, chairman of the board and special committee, said in a statement. “While a sale remains only one of the alternatives under consideration, we believe it merits more thorough examination.”
Other options included changing the company’s financial structure or revamping its strategic direction.
The special committee is also considering a possible securitization financing, which could be used by the potential buyer or in a recapitalization of the company, Wendy’s said.
The possible sale comes as Wendy’s lowered its 2007 earnings forecast. It cited lower-than-expected same-store sales and higher-than-anticipated commodity costs.
Store sales have been “challenging” over the last two months as it has reworked its pricing to bring its products in line with competitors, the company said.
Same-store sales increased 3.8% at U.S. restaurants in the first quarter and are up 0.7% in the second quarter through June 15, the company said.
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