Analysts: Arby's could fetch $300M-plus

Arby’s, the 3,700-unit chain that is under strategic review by parent company Wendy’s/Arby’s Group Inc., may fetch a price tag of more than $300 million, according to a few securities analysts who cover the company.

Atlanta-based Wendy’s/Arby’s Group announced Thursday it was exploring options for Arby’s, including a possible sale, less than three years after a $2.3 billion merger with 6,600-unit Wendy’s created the merged company.

Most observers viewed the news as a positive step for Wendy’s/Arby’s, which could regain focus on the Wendy’s brand, helping it to drive growth in the U.S. and international markets and continued menu changes aimed at driving consumer traffic.

Arby’s had faltered during the past few years, and Wendy’s/Arby’s has been unable to complete a turnaround for the brand best known for its roast beef sandwiches.

“We view today’s announcement Wendy’s is exploring strategic alternatives for Arby’s, including a sale, as a positive catalyst for shares,” John Glass, restaurant analyst for Morgan Stanley, wrote in a research note. “We believe the legacy Arby’s business, which came with the merger and has been a chronic underperformer, was both a distraction for management and a deterrent to potential shareholders. While it is unclear if a sale would be accretive to earnings … the transaction could improve margins and returns at the parent company.”