A Gulf buyout firm that has spent the year buying into Saudi finance is now part of a group trying to buy one of America’s best-known burger chains.
BlueFive Capital is one of four investors behind an offer of about 5.3 billion Riyal ($1.4 billion) to take Wendy’s private. The other three are activist investor Nelson Peltz’s Trian Fund Management, Flynn Group, the restaurant chain’s largest franchisee, and investment firm Sixth Street.
The group is offering $7.35 a share in cash. That’s about 20% above Wendy’s closing price before the bid became public, but about 10% below where the stock started the year.
Wendy’s confirmed the proposal last week. It said the offer is non-binding and that a committee of independent directors, advised by Morgan Stanley, will review it.
Why the chain is in play: Wendy’s sales at established restaurants have fallen for six straight quarters, and customer visits fell 12.5% in the second quarter. Trian already owns more than 16% of the company, and Peltz was its chairman for 17 years.
Who BlueFive is: the Abu Dhabi-based firm manages about $15 billion. It was founded by Hazem Ben-Gacem, a former co-chief executive of Bahrain-based investment firm Investcorp.
The Saudi footprint: BlueFive has been one of the busiest foreign buyers in the Kingdom this year.
It agreed to put $34 million into struggling Riyadh-listed insurer Gulf General Cooperative Insurance for a 42% stake. The rescue cuts the insurer’s capital to absorb its losses, and its major shareholders turn a $13.3 million loan into shares. The deal still needs regulatory and shareholder approval.
In June, it closed its purchase of a large stake in Jeddah-based Islamic asset manager Sidra Capital, which manages $3.8 billion and is being renamed BlueFiveSidra. The Saudi Al-Murjan Group took a stake in BlueFive’s Islamic investment arm in return.
Beyond the Gulf: BlueFive is also the biggest investor in a consortium led by New York-based HOF Capital that bought Porsche’s stakes in Bugatti Rimac and its parent, Rimac Group. That’s 45% of the company behind the Bugatti hypercar and 21% of the Croatian electric-car maker. The deal closed in September.
Ben-Gacem called it “more than simply a financial transaction.”
The playbook: BlueFive calls it “buy and build”. It buys a foothold in a fragmented sector, such as insurance or fleet leasing, then adds rivals to it. With Bugatti, it’s buying into a luxury brand it can grow. The Wendy’s bid applies the same idea to fast food, alongside the operator that runs more of its restaurants than anyone.
Why it matters: Gulf money is no longer just writing cheques for other people’s buyouts. Firms like BlueFive now sit at the table, from Saudi insurers to Bugatti and US fast food.
What to watch: Wendy’s reports third-quarter results on Thursday, its first update since the bid. Investors will be looking for any word from the board’s committee.
For more on Gulf private equity in Saudi Arabia, read Investcorp’s $500 Million Fund Buys Into Saudi Firm REDA.
