Wendy’s to sell 81.5% stake in Arby’s

Associated Press

NEW YORK

The marriage of square burgers and roast-beef sandwiches is about to end.

Wendy’s/Arby’s Group Inc. said Monday that it will sell a majority stake in its struggling Arby’s brand to Roark Capital Group, the Atlanta private-equity firm. The move marks the end of a short-lived union between the two fast-food chains and represents a role reversal. Arby’s started as the suitor in the relationship and ended up on the chopping block.

In an interview with The Associated Press, Wendy’s/Arby’s Group CEO Roland Smith said that the 2008 combination of the two fast-food chains had “absolutely not” been a failure.

“I think that at the time we put the two brands together, it was the exact right thing to do,” Smith said, “but any business that continues to do well and perform has to be nimble and adapt to what the market is.”

Wendy’s/Arby’s shares ended trading Monday up 4 cents at $4.56 as investors signaled modest pleasure with having more clarity about the company’s future. But the shares remain well below $5.90, their price on the day the combination was announced in September 2008.

Roark, which already owns Moe’s Southwest Grill, Cinnabon and other restaurants, will pay $130 million in cash for an 81.5 percent stake in Arby’s. It also will assume $190 million worth of Arby’s debt.

Roark also announced Monday that it bought Il Fornaio (America) Corp., owner of the Corner Bakery Cafe and Il Fornaio Restaurants and Bakeries.