After lowering its 2007 earnings outlook, Wendy's International announced today that it has decided to explore a possible sale of the company. While a sale remains only one of the alternatives under consideration, Wendy's said that it believes the potential transaction merits more thorough examination.

The company is also evaluating a possible securitization financing of the company, also known as whole business financing and an increasingly talked method of raising cash, as demonstrated by the $1.7 billion deal by Dunkin Brands which came to market in May 2006.

The financing could be used by a potential buyer or in a recapitalization of the company, Wendy's said.  Lehman Brothers is the lead structuring advisor and JPMorgan is co-structuring advisor. No time frame on the process was set as of press time.

The company's revised Ebitda range is $295 million to $315 million -- slightly lower than its previous guidance of $330 million to $340 million -- as a result of lower-than-planned same-store sales and higher-than-expected commodity costs. While same-store sales were up 3.8% at U.S. company restaurants in the first quarter of 2007, they dropped in the second quarter, up a meager 0.7% through June 15.  The company recently spun-off Tim Hortons, its coffee-and-doughnut chain, sold its Baja Fresh Mexican Grill and laid off employees at its corporate office, reports said.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.