Wendy’s Proceeding With Tims Spinoff

The Globe:

U.S. burger giant Wendy’s International Inc. was given the green light to proceed with its spinoff of Canadian coffee and doughnut chain Tim Hortons Inc. on Friday, after a U.S. judge rejected a last-minute attempt by note holders to thwart the plan.

Judge Victor Marrero issued his ruling late Thursday after listening to arguments in U.S. district court in New York City, saying he was not persuaded that the bondholders would prevail in their effort to prove Wendy’s broke agreements it had with the investors with the spinoff.

Dublin, Ohio-based Wendy’s — which previously sold 17.25 per cent of Tim Hortons through an initial public offering in March — is now poised to distribute the remaining 82.75 per cent to its shareholders in a special dividend on Friday.

It has already confirmed the distribution ratio for the special dividend at 1.3542759 shares of Tim Hortons common stock for every share of Wendy’s stock held.

The plaintiffs — including Aflac Inc., Massachusetts Mutual Life Insurance Co., Swiss Re, Millennium Partners and Wellington Trust Co. — had alleged that Wendy’s spinoff plan violated the terms of the indentures governing Wendy’s public debt.

They had also argued that Wendy’s plans to transfer all of its holdings in Tim Hortons through a dividend to shareholders would irreparably harm them, adding Wendy’s management refused to discuss the plans with them prior to the filing of the lawsuit.