LOS ANGELES – Triarc Cos. Inc. (TRY.B), parent of the Arby's fast-food chain (search), said Tuesday it will buy its biggest franchisee for about $306.9 million and will explore a spin-off of its restaurant business to the public.
The move will help "unlock the value" of both Triarc's primary restaurant and asset management businesses by allowing them to grow independently, the company said.
Triarc will pay $175 million in cash for RTM Restaurant Group (search), which operates 775 Arby's outlets, and will also issue RTM 10 million of its class B shares. Triarc's class B stock rose $1.43, or 10.8 percent, to $14.62 on the New York Stock Exchange on Tuesday.
Triarc described the transaction as "accretive" but provided no details. RTM operates 775 of the roughly 3,500 restaurants in the Arby's system.
As part of the deal, New York-based Triarc plans to consolidate all its restaurant holdings under its Arby's Restaurant Group business. The company is also weighing a corporate restructuring under which its restaurant unit would be separated from its Deerfield asset management business through an initial public offering.
Triarc, which has a 64 percent stake in Chicago-based asset manager Deerfield & Co. LLC (search), said it is considering expanding that business through the creation of one or more investment funds that would be managed by its senior officers.
"Deerfield and Arby's have inherently different growth characteristics and investment attributes," Triarc Chairman and Chief Executive Nelson Peltz said in a statement. "With our present corporate structure, we believe that their full value and their growth prospects may not be adequately reflected in our stock price."
If the restructuring is approved by Triarc's board and completed by Jan. 3, RTM shareholders will get class B shares representing about 16 percent of Triarc's equity. If the restructuring does not occur before the Jan. 3 deadline, RTM can elect to receive a new type of Triarc class B shares that will convert into 10 million regular class B shares.
The deal also includes Triarc assuming about $420 million of RTM's net debt and related prepayment expenses, the companies said in a statement.
Douglas Benham, Arby's president and CEO and former RTM executive, will continue to lead the chain following the deal. RTM President Thomas Garrett will become Arby's chief operating officer. The company will be headquartered in Atlanta.
Citigroup Global Markets Inc. acted as a financial advisor for Triarc on the deal. RTM used TM Capital Corp. as its financial advisor.
Triarc's class A shares were up $1.42, or 10 percent, at $15.61 Tuesday on the New York Stock Exchange.