Zacks_Analysts' Blog : Wendy's/Arby's Eyeing CKE - Analyst Blog

According to a recent report in the New York Post, Nelson Peltz’s Trian Fund Management, the owner of Wendy’s/Arby’s Group Inc. (WEN) is looking to acquire CKE Restaurants Inc. (CKR).

 

Atlanta-based, Wendy’s/Arby’s Group is considering a bid of $1 billion for CKE Restaurants, the operator of Carl's Jr. and Hardee's fast food chains.

 

Earlier, in February 2010, CKE agreed to a buyout offer from Boston, Massachusetts-based, private equity investment firm Thomas H. Lee Partners. The firm agreed to acquire CKE for around $928 million, including the assumption of approximately $309 million of net debt. CKE shareholders were to receive $11.05 in cash for each share of the company they held.

 

However, CKE did clarify that it would be looking for accretive offers from other parties until April 6, 2010. The Carpinteria, California-based company, CKE operates more than 3,100 restaurants.

 

CKE has been experiencing a sustained fall in its top-line. After declining 4.2%, 4.7% and 3.7% in the first, second and third quarters of 2010, total revenue tumbled 5.4% to $236.8 million in the fourth quarter precipitated by a fall in same-store sales.

 

The weak economy continues to hurt same-store sales, which fell 6% compared to an increase of 0.3% in the year-ago quarter. Same-store sales at the company’s restaurant concepts, Carl's Jr. and Hardee's restaurants, fell 8.7% and 2.5%, respectively during the quarter.