Wendy's Says Nelson Peltz Gave 'Ultimatum'

DES MOINES, Iowa – Wendy's International Inc. (WEN), ending a traumatic year on the offensive, Friday accused a major shareholder of delivering "an ultimatum" to get its chief executive's attention.

The hamburger chain released a week-old letter sent by CEO Jack Schuessler to investor Nelson Peltz, saying he was "disappointed" at how Peltz's group's recent regulatory filing had characterized communications — or a lack thereof — with the company.

That filing, made Dec. 13, had said that Peltz and colleague Peter May had asked to meet with Schuessler "to discuss our value creation plan."

The pair said if their plan would be agreed to "we would possibly maintain our ownership below 5 percent (and not file a Schedule 13-D) because our intention was not to wage a 'battle in the press.' "

A Schedule 13-D filing (it gets its name from Section 13-D of the Securities Act) is generally used to explain how a stake of at least 5 percent in a company was acquired, the purchaser's background and future plans regarding the target company.

The Peltz group's Securities and Exchange Commission filing went on to say that a senior Wendy's executive had replied that Schuessler was "too busy 'managing the brand' to meet with us."

Peltz's group, called Trian Fund Management LP, disclosed what it said was a 5.5 percent stake in Wendy's.

In his Dec. 22 letter to Peltz, a copy of which was provided to Dow Jones Newswires, Schuessler interpreted what happened somewhat differently.

"My understanding of your conversation with John Barker (a Wendy's senior vice president) was that you presented us with an ultimatum — a meeting with me within 48 hours, or else you would immediately file a 13-D.

"You then declined to disclose to Mr. Barker the nature and extent of your interests in Wendy's shares. Your 13-D filing followed quickly thereafter," Schuessler's letter said.

It added that while "we ask for and appreciate input from our shareholders and take seriously all responsible proposals and recommendations," those suggested by Peltz's group had been "previously analyzed and considered."

Among those suggestions was an immediate total spinoff of Wendy's Tim Hortons coffee-and-doughnut shop chain. Wendy's has a 15 percent to 18 percent partial public offering of that key business pending.

Representatives of Peltz and May, and the Triarc Cos. that they control, couldn't immediately be reached for comment Friday. Triarc owns the Arby's sandwich shop chain.

Thursday, after the financial markets closed, Wendy's said it would undertake an accelerated buyback of 3.75 million shares of its common stock for about $207 million.

It also issued an update on various strategic initiatives it had undertaken in recent months, saying it "continues to demonstrate significant progress ... to generate long-term value for all stakeholders."

Wendy's had laid out many of those objectives last July, after several hedge funds had taken large stakes in the company and one, Pershing Square Capital Management, had urged a major restructuring to enhance shareholder value.

Wendy's was confronted with what proved to be an extortion attempt, when a woman alleged that she had found a fingertip in a bowl of Wendy's chili. It was later discovered that it had been planted.

Shares of Wendy's were at $55.18, down 46 cents, or 0.8 percent, on the New York Stock Exchange