Triarc (TRY ), the investment vehicle of savvy dealmakers Nelson Peltz (chairman and CEO) and Peter May (president and chief operating officer), is a deal waiting to happen. Triarc is on the prowl for yet another buy that could yield rich returns. Or the company itself could be a target, mainly because of its major asset--Arby's, the 10th-largest fast-food chain, with 3,323 outlets in the U.S. and Canada. Although Peltz says neither Triarc nor Arby's is for sale "at this time," he declines to say whether he has had any offers. Peltz and May own 34% of Triarc.

They need a deal soon to boost Triarc's price. Shares fell from 28.55 on May 15 to 23 on July 22, in part because Triarc lost its bid to buy Burger King, which analysts say could have been a high-return acquisition and push company earnings way up. Texas Pacific Group won the bidding. Triarc is now at 24.

Triarc has a cash hoard of $700 million, or $30 a share, notes Michael Gallo, an analyst at investment firm CL King & Associates, who rates the stock a strong buy. (He doesn't own shares, and CL King has no banking ties with Triarc.) Arby's is worth a further $12 a share, figures Gallo. Triarc is an enticing sum-of-the-parts play, he argues. Whether or not Triarc bags another prize company or ends up as the big catch, Gallo says "Triarc at its current price is a compelling value."

Analyst Jan Loeb of investment firm Jefferies, who also rates Triarc a buy, says Peltz and May have an enviable 20-year record of buying and selling businesses. (Neither Loeb nor Jefferies owns shares.) One such deal: The acquisition of Snapple Beverage Group in 1997 for $300 million. In 2000, Triarc sold it for $1.4 billion to Cadbury Schweppes. Loeb sees Triarc doing another deal this year that may be the "last hurrah" for Peltz and May, who both turned 60 this year.

By Gene G. Marcial

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