In this file:

 

·         Wendy’s Objects to Flynn Restaurant Group’s Bid for NPC

·         In NPC bid, Greg Flynn makes his biggest play yet

 

 

Wendy’s Objects to Flynn Restaurant Group’s Bid for NPC

The fast-food chain disapproves of bidding protections and competition with Flynn’s other brands.

NPC, which operates almost 400 Wendy’s units and roughly 900 Pizza Hut stores, filed for bankruptcy July 1.

 

Ben Coley, QSR Magazine

November 17, 2020

 

Flynn Restaurant Group’s path to purchasing NPC International met resistance last week when Wendy’s filed a limited objection stating that it hasn’t given consent for Flynn to operate any stores.

 

NPC, which operates almost 400 Wendy’s units and roughly 900 Pizza Hut stores, filed for bankruptcy July 1 with approximately $900 million worth of debt. The franchisee entered bankruptcy with 1,200 Pizza Hut units, but the operator and Pizza Hut agreed to close up to 300 underperforming locations, most of which were dine-in concepts.

 

Flynn—the largest restaurant franchisee in the U.S—submitted an $816 million bid to acquire all of NPC’s assets. A court approved the operator as the stalking horse bidder, which means that it sets the bar prior to the bidding process. Flynn’s bid is already significantly higher than NPC’s $725 million asking price. Flynn currently franchises Arby’s, Panera, Taco Bell, and Applebee’s.

 

Wendy’s took issue with the stalking horse bidder designation for multiple reasons.

 

The first problem is the break-up fees. If Flynn isn’t the winning bidder, it could receive a break-up fee as high as $20.4 million. Bidding procedure rules mandate that a qualified bid must be greater than cash purchase price and assumed liabilities plus the sum of any bid protections, plus $1 million. This essentially means that a bidder would not only have to overcome $816 million, but also another $21 million because of the break-up fee and additional $1 million.

 

“The Bid Protections are more likely to chill bidding than encourage it,” Wendy’s wrote in the filing. “… Moreover, the Bid Protections do not appear to be necessary to spur competition. The Debtors’ Motion reveals that many of the parties who have submitted indications of interest have done so for multiple regions. This suggests that the Bid Protections are not necessary to generate interest in the assets.”

 

To Wendy’s argument, the sales process has proven to be competitive. According to court documents, 26 active potential buyers have conducted due diligence for the Wendy’s assets and 32 active potential buyers have conducted due diligence for the purchase of the Pizza Hut assets.

 

The second obstacle is that Wendy’s hasn’t consented to Flynn’s potential ownership of 394 Wendy’s stores because...

 

more, including links

https://www.qsrmagazine.com/fast-food/wendys-objects-flynn-restaurant-groups-bid-npc

 

 

In NPC bid, Greg Flynn makes his biggest play yet

The CEO of Flynn Restaurant Group is pushing a megadeal for the Wendy’s and Pizza Hut operator that would create the third-largest restaurant operator in the U.S., says RB's The Bottom Line.

 

By Jonathan Maze, Restaurant Business

Nov. 17, 2020

 

The larger Flynn Restaurant Group gets, the bigger the deals it must do to generate the kind of growth it has become accustomed to since its founding in 1999.

 

But it will be awfully difficult to top the one it is currently working on.

 

The company, based in San Francisco and overseen by Chairman and CEO Greg Flynn, is trying to buy NPC International, the largest franchisee in the Pizza Hut and Wendy’s systems. Among franchisees, it would be the equivalent to McDonald’s buying Starbucks, a monster combination unlike anything the sector has seen, and one that would create one of the very largest restaurant operators in the U.S.

 

Flynn Restaurant Group, or FRG, operates 1,200 locations in the Applebee’s, Arby’s, Panera and Taco Bell systems. It generated $2.3 billion in sales last year, according to court documents. That makes it the largest franchisee in the U.S., according to the Restaurant Finance Monitor.

 

No. 2? NPC International, owner of some 900 Pizza Hut and nearly 400 Wendy’s units which did $1.6 billion in sales, according to the Monitor.

 

To put that into perspective, the franchisees’ combined sales of $3.9 billion are about the same as the U.S. system sales for Arby’s. That would also make FRG one of the 5-10 largest restaurant operators in the country in terms of sales.

 

With about 2,500 units, a Flynn-NPC combo company would operate about the same number of locations as Chipotle Mexican Grill. Indeed, based on units operated, FRG-NPC would be the third-largest restaurant operator in the U.S., according to data from Restaurant Business sister company Technomic.

 

There are roadblocks, to be sure.  Foremost among them is Wendy’s objection to the sale, suggesting some difficult negotiations between the company and Flynn over various issues—namely, Flynn’s operation of Panera and Arby’s units, as well as commitments for remodels and new units.

 

Maybe a bigger roadblock, however, is the presence of a lot of other bidders...

 

more, including links 

https://www.restaurantbusinessonline.com/financing/npc-bid-greg-flynn-makes-his-biggest-play-yet