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LOS ANGELES - Wendy's International, which has been working to turn around its chain of hamburger restaurants, said yesterday it was reviewing strategic options to boost shareholder value, including a possible sale of the company.
The announcement, which sent Wendy's shares up 13.4 per cent in extended trading, came as the company said its burger chain, No 3 in the United States, reported a profit in the most recent quarter after posting an operating loss in the same period a year ago.
Wendy's, which is significantly smaller than rivals McDonald's and Burger King, has been remodelling restaurants, selling outlets to franchisees and tweaking its menu as it works to revitalise sales and profits at its more than 6600 restaurants.
But one analyst said some investors doubted whether those moves would ultimately translate into higher operating profit, adding that many thought Wendy's might consider going private.
"Most of the Street is sceptical about their ability to realise that operating profit," said Larry Miller, restaurant analyst at RBC Capital Markets. "That's why the privatisation thing has been bantered around."
Wendy's has suffered as McDonald's and Burger King turned around their businesses, stealing market share from their smaller rival.
"With everything that's been happening in the sector, you have to ask 'Where does Wendy's go?"' said Howard Davidowitz of Davidowitz & Associates.
"This is something that private equity is going to be interested in. This is a powerhouse brand."
- REUTERS
