Wendy’s (NASDAQ: WEN) is a big name with a relatively small balance sheet, a scenario which might be appealing to rivals or private equity firms who are looking to buy the brand for cheap. After selling Arby’s to Roark Capital Group in order to receive $130 million in cash and unload $190 million in Arby’s debt, Wendy’s can find itself among the list of recent restaurant takeover targets. Trading at a low sales multiple of 0.94 while growing its 5-year revenue figure by 14.5%, Wendy’s is undervalued within its peer group. McDonald’s for example, offers investors a price multiple of 3.65 and top line performance has actually been almost 1000 basis points worse.
Well said! Wendy's has a lot of things going for it that a potential takeover buyer would love. Even if that doesn't happen, the company seems to be turning around with some very positive improvements-some of which won't show up on the bottom line yet. The beef seems to be a much higher quality than in the past-certainly better than the competition, other than perhaps Steak-n-Shake.
No. Takeover attractiveness causing speculation. Lousy rudderless company profit-wise with obvious untapped Brand value. Company has been trading a narrow range for a long time yoyo-ing on similiar speculation.
If I had to guess on potential buyers, I might think of Berkshire Hathaway (has Dairy Queen?), or YUM, or perhaps a private equity group that might want to take it private. I seem to recall that Wendy's was in discussions at one time with a potential suitor, but the name was not mentioned in the story.