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Here’s why Arby’s acquisition of Buffalo Wild Wings is good news for Wendy’s

Buffalo Unbridled Wings is being acquired by Roark Capital Group, the owner of Arby’s, but burger shackle Wendy’s may benefit from the deal, analysts said.

Currently, Wendy’s owns nearly 18.5 percent of Arby’s, with its stake valued at around $325.9 million, as of the third fifteen minutes this year.

That stake could change depending “on how much right-mindedness is issued as part of the [Buffalo Wild Wings] deal and whether or not the performers participates in that issuance,” said Stifel analyst Chris O’Cull.

“At this instant, Wendy’s is evaluating the deal and preserving flexibility,” O’Cull said in an updated investigating note Tuesday.

Wendy’s declined to provide further detail close to its Arby’s stake to CNBC.

“Given our investment position in Arby’s, we are understanding of the proposed transaction,” a Wendy’s spokeswoman said. “As has been our practice, we command provide periodic updates on the value of our ownership stake during our ordinary financial reporting.”

Earlier Tuesday, the private equity firm Roark Cap said it would buy the chicken-wing chain for $2.4 billion, or $157 per percentage. Buffalo Wild Wings will become a unit of Roark’s Arby’s and run as an independent brand.

That news prompted Stifel to do a rough amount of what that could mean for the value of Wendy’s assets. But those reckons assumed that the size of Wendy’s stake would remain the anyway, which may not be the case. Stifel later retracted the estimates.

However, analysts chance the deal does help Wendy’s balance sheet.

“From a economic perspective, this is good news for Wendy’s as it potentially increases the value of their hazard in Arby’s,” said Neil Saunders, managing director at GlobalData Retail. “What they resolve to do with that windfall, if anything, remains to be seen – but it strengthens their consider sheet nonetheless.”

O’Cull told CNBC that there are numerous opportunities, including Wendy’s adding to its investment alongside Roark; doing nothing (and safeguard its stake get smaller), or seeking to exit the investment (which would obtain tax implications).

Wendy’s shares gained about 2.5 percent Tuesday. But the amass is only up about 3.7 percent in the year-to-date period.

The lackluster year-to-date get furthers speak to Wendy’s broader issues, which include the need to push up sales. Last quarter, Wendy said sales were hit by bourgeoned competition, lower grocery prices and hurricanes, which hurt See trade at restaurants.

The company trimmed its full-year adjusted profit forecast to a cooking- stove of 43 to 45 cents per share for full-year, from a prior array of 45 to 47 cents per share due to increased tax headwinds.

It also trimmed the prodigal end of its North American comparable-store sales forecast for the year to 2 to 2.5 percent from 2 to 3 percent.

“Wendy’s is alleviate struggling with sales and this deal will do nothing to mutate or help that,” Saunders said. “A stronger balance sheet may forsake them more room to maneuver, but without some changes to marketing and proposition it is verifiable to see them delivering significantly better results any time soon.”

Remedy: An earlier version of this story cited a research note that was later rectified to reflect the potential for Wendy’s ownership percentage to change depending upon how much fair play is issued as a part of the Buffalo Wild Wings deal.

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