Tuesday, July 31, 2007

Paperstand (WEN, BLK)

According to the WSJ, Nelson Peltz said his Triarc is willing to offer $37-41 a share to buy Wendy’s (WEN), but the billionaire investor is balking at Wendy's request to sign a confidentiality agreement as part of the sale exploration process. Yesterday, Mr. Peltz sent Wendy's Chmn James Pickett a letter pressing the board committee considering the Wendy's sale to accept a confidentiality agreement that is more favorable to Mr. Peltz, who is Chmn of Triarc and CEO of Trian Fund Mgmt. Mr. Peltz has previously said Triarc is interested in exploring a bid for Wendy's. Yesterday's letter marks the first time he has given any indication of what Triarc might pay. And his pushback on the confidentiality agreement hints he may pursue a less friendly purchase or other type of shake-up at the chain if Wendy's directors won't negotiate with him on his preferred terms.

According to the “Heard on the Street” column in recent days, the so-called spreads on pending merger deals have widened drastically over concerns that tighter financing could put the transactions in jeopardy. In a report issued Fri, Goldman Sachs recommended that investors bet on a basket of 22 pending LBO transactions. David Kostin calculated a 36% avg annualized return for the group based on current spreads. Among the deals included in Mr. Kostin's basket are a proposed LBO of SLM (SLM). SLM's stock was trading at a nearly 20% discount to the $60 takeover price. Goldman's basket also includes Ceridian (CEN) and FNF (FNF). Buyouts of Hilton (HLT) and ADS (ADS) are also part of the basket. Investors may want to demonstrate some restraint, however, on betting on the next likely deal. "We est 'mega-cap' LBOs of 20+ bn euros [$27.3bn] are off the table until the existing pipeline of loans can be repriced and placed and leveraged credit mkts stabilized," wrote UBS analyst Daniel Stillit. In the US, takeover traders cited real-estate stocks such as Starwood (HOT) and Post Properties (PPS) as among those that recently have fallen after rising on speculation they would be LBO bait.

Barron’s Online “Inside Scoop” section reports that BlackRock (BLK) insiders have sold a record number of shares of the co this year as the stock hovers near record highs. So far this year, 5 top execs grossed more than $82.4m by selling 486K shares on the open mkt. The largest seller was Keith Anderson, vice chmn and global CIO of fixed income. He sold 201K shares for $34.2m. Among the most recent sellers, Laurence Fink, chmn and CEO, disposed of 53K shares on the open mkt for $9.07m. Mark LoPresti, of Thomson Financial, says that BlackRock is run by ppl who are "very knowledgeable about the mkt and are savvy about technicals." The lack of excessive selling as the stock retests a resistance level indicates insiders are "more fearful than greedy" in capturing profits.

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