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Monday, September 18, 2006

Wendy's Confirmed Tim Hortons Spin-Off Terms

Wendy's (WEN) has confirmed the ratio and dates for the expected spin-off of its recent IPO of its Time Hortons (THI) unit. Wendy's present stake of 82.75%, or some 159.9+ million shares, is being kicked entirely to shareholders of WEN at a ratio of 1.3542759 THI shares per 1 share of WEN. This will be paid in the form of a stock dividend to WEN holders as of SEPT. 15, 2006.

Please note that if you buy shares of WEN tomorrow, you will not get the THI shares. Shareholders who sell their shares of Wendy's common stock in the "regular-way" market (i.e., the normal trading market on the New York Stock Exchange under the symbol "WEN") before the distribution date of Friday, September 29 will be selling their right to receive shares of Tim Hortons common stock in connection with the spin-off. Shareholders may currently trade in a "when-issued" market (i.e., trading in Wendy's shares without the right to receive Tim Hortons common shares under the symbol "WEN wi"). A "when-issued" market also exists for the Tim Hortons shares on both the New York and Toronto stock exchanges. Partial shares will not be paid out but will be aggregated by the transfer agent and sold as cash in the market.

You can see the full release at the corporate site HERE.

Tim Hortons (THI) had a market cap of $4.9 Billion as of today's close. Wendy's (WEN) had a market cap of $7.49 Billion as of today's close. THI is one of the names that has been speculated as a potential S&P Mid Cap 400 Index name, and Wendy's (WEN) is a member of the S&P 500 Index. WEN will lose some of its weighting in the S&P 500, and it is possible that they will move down to the S&P Mid Cap 400 Index at some point. THI is a name that has been speculated as an add into the S&P Mid Cap 400 Index, although there can be some expected wiggling ahead of this formal change and while WEN/WI is trading. Sometimes those index trades take months to occur, and some of them never do formally occur.

Jon C. Ogg
September 18, 2006

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