When Arby’s restaurant franchiser Triarc Companies Inc. asked Paul Ginsberg in July 2007 to help satisfy its hunger for fast food competitor Wendy’s International, Inc., Ginsberg had to prove that his client paid proper respect to Wendy’s Ohio style.
Ginsberg, the cohead of Paul, Weiss’s M&A practice, had already advised Triarc in unsuccessful bids for Burger King Holdings, Inc., and Dunkin’ Brands, Inc. At first the Wendy’s deal seemed similarly doomed. The family of Wendy’s founder Dave Thomas, who died in 2002, preferred rival bidder David Karam, an Ohio Wendy’s franchisee and president of Cedar Enterprises, Inc.
Triarc owners Nelson Peltz and Peter May had already made enemies at Wendy’s by agitating for change through board members that their investment fund, Trian Partners, had backed. Peltz had a past as a corporate raider that may have rubbed Wendy’s the wrong way-he’d previously made investments in Cadbury plc; Cracker Barrel Old Country Store, Inc.; H.J. Heinz Company; and Kraft Foods Inc.
There were other obstacles too. During Triarc’s pursuit of Wendy’s, the debt markets soured, scuttling Triarc’s hope to make an all-cash bid. And in April 2008, an unnamed competing bidder closed in.
The sweetened deal that Ginsberg helped shape called for Triarc to use a $2.3 billion all-stock transaction, maintain Wendy’s Ohio headquarters, keep two Wendy’s designees on the merged board of directors, consolidate Triarc’s dual-class common stock into a single class with Wendy’s WEN stock market symbol, and rebrand the new company Wendy’s/Arby’s Group, Inc. Meanwhile, Ginsberg went native, showing up for a management presentation wearing Ohio State University’s scarlet-and-gray colors and making a point of snacking on Wendy’s signature Baconator, a double cheeseburger with bacon.
“They had concerns about somebody outside of Dublin, Ohio, acquiring the company and changing the way it had historically done business,” says Ginsberg. “But we ultimately made them feel comfortable.”
See all of our 25 Dealmakers of the Year, from the April 2009 issue of The American Lawyer.