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CNBC Interview: Peltz Seeks 'Fair' Confidentiality Pact With Wendy's


Billionaire investor Nelson Peltz, who earlier this week said he was prepared to offer $37 to $41 a share for Wendy's International, told CNBC that he hopes to negotiate "a fair confidentiality agreement" with the fast-food chain.

"All we've asked them to do is be reasonable," Peltz said in a taped interview with CNBC's David Faber. "And if they're reasonable, then we can negotiate a fair confidentiality agreement...We have a very short time for it to happen, but we'll see."

Peltz's proposed bid, which was disclosed in documents filed with the U.S. Securities and Exchange Commission after the market closed on Monday, represents a premium of 10% to 22% over Wendy's closing price on Monday.

Peltz on Private Equity

Peltz is chief executive of Trian, which owns a 10% stake in Wendy's, and has pushed the company to make changes to boost its shares.

Peltz also is chairman of Triarc Companies, which controls fast-food chain Arby's.

Wendy's reported last week that it swung back to a profit in the second quarter after a year-ago loss that was the result of writing down the value of its struggling Baja Fresh Mexican Grill chain and cutting 355 corporate office jobs.

The third-largest hamburger chain, which said in April that it is exploring a possible sale of the company, said Thursday that it earned $29.2 million, or 33 cents per share, for the three months ended June 30. It lost $29.1 million, or 25 cents per share, a year ago.

In the past, Peltz has questioned Wendy's strategy and pressured the company to speed up a spin-off of the Tim Hortons coffeehouse chain. His strategy also has led to the sale of the Baja Fresh chain to an investment group.

In April, Wendy's Chief Executive Kerrii Anderson told analysts that the move to consider a strategic review or sale was driven by the board and was not her decision. Three of Wendy's board members were nominated by Peltz in March 2006.

The company also said it reached a deal in the second quarter to sell its Cafe Express chain.

Wendy's operates about 6,600 restaurants in the United States and abroad. It trails McDonald's and Burger King Holdings in the burger business.

In the CNBC interview, Peltz also offered his insights into the turbulent credit markets.

"We all knew this [tightening] was coming. We didn't know when -- and now that it's come upon us, nobody is ready for it. That happens with all of these kinds of market busts. But it had to happen, when you see so many deals done with companies that don't generate a lot of cash flow, getting leveraged at nine, 10 times EBITDA," the financier said.

Peltz spoke optimistically about the markets. "I do think there is a lot of capital out there that will save the good credits. There are a lot of good companies with bad balance sheets -- but that's OK, it will get resolved," he said.

"The banks will be back in business in the relatively near future," Peltz predicted.

He foresees a return to prominence for strategic buyers, which "have the balance sheets" and can "get the bank credit, even today" to finance acquisitions. Peltz believes strategic buyers are "the logical owners" of businesses, as they are able to eliminate "gobs of overhead and potential sales duplications" far more efficiently than can private equity.