Franchisee Joins Bidding For Wendy's

(Wednesday, September 26, 2007) - The owner of 134 Wendy's (WEN) restaurants wants to make a bid for the third-largest hamburger chain with the help of two private-equity firms.

David Karam, president of Cedar Enterprises, told The Columbus Dispatch for a story Wednesday that he and his partners have been invited by Wendy's International to a second round of talks. He is backed by Kelso & Co. and Oak Hill Capital Partners.

The effort also has the backing of the family of Wendy's founder Dave Thomas, said Pam Thomas Farber, Thomas' daughter. The family would like to see the company turned over to someone involved in the company, she said.

Cedar Enterprises, based in the Columbus suburb of Upper Arlington, owns 134 Wendy's restaurants in several states with revenue of $200 million.

"I believe in the brand," Karam told the newspaper. Customers have a bond with the brand, he said, and "under the right leadership, it could be reignited."
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Karam's first-round proposal, called an indication of interest, gave him entry into a second round of talks that is expected to bring bids next month. He would not disclose how much he proposed to pay for Wendy's, but said it was not far from the $37 to $41 a share that billionaire investor Nelson Peltz has said his company, Triarc (TRY), is prepared to offer. Triarc owns fast-food chain Arby's and is a major Wendy's investor.

Karam's father, Joseph, was one of Wendy's original investors and became a franchisee in 1975.

Wendy's formed a committee in April to determine ways to boost its stock price, including a possible sale. A message seeking comment was left with the company Wednesday.

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