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Financing

Wendy’s biggest shareholder may take the chain private

Nelson Peltz’s Trian Partners, which owns nearly 20% of the company’s stock, said it has approached the board about a possible acquisition, sending the shares soaring.
Wendy's Nelson Peltz
Photograph: Shutterstock

Nelson Peltz may take control of Wendy’s.

Peltz’s Trian Partners disclosed in a federal securities filing that it has approached the board about a potential acquisition that could “enhance shareholder value.”

The filing strongly suggested that Peltz, whose fund controls nearly one-fifth of Wendy’s stock, could take the company private. “Such a potential transaction could include an acquisition, business combination (such as a merger, consolidation, tender offer or similar transaction) or other transaction that would result in the acquisition of control of the company by” Trian, the filing says.

News of the filing sent Wendy’s shares soaring after hours, up more than 14%.

In a statement, Wendy’s said it would review any proposals submitted by Trian. “The Wendy’s Company’s board of directors and management team regularly review the company’s strategic priorities and opportunities with the goal of maximizing value for all shareholders,” the company said in a statement. “Our board is committed to continuing to act in the best interests of the company and its stockholders. Consistent with its fiduciary duties, the board will carefully review any proposal submitted by Trian Partners.”

The filing potentially ends a long period of relative quiet for the Dublin, Ohio-based Wendy’s. After years of struggles, which included the sale of Baja Fresh and the spinoff of Tim Hortons in 2006—amid agitation from Peltz—the brand merged with Arby’s, owned by Peltz. That merger made Peltz Wendy’s biggest shareholder. Trian controls three seats on the Wendy’s board, one of which is occupied by Peltz himself.

Arby’s struggled and Wendy’s sold the brand to Roark Capital in 2011.

Peltz could theoretically take Wendy’s private more easily than anyone else, simply because he already owns more than 19% of the company’s stock, and the company is trading at a nadir. Wendy’s shares ended Tuesday down more than 30% on the year. The company has a market cap of about $3.5 billion and an enterprise value of $6.2 billion, according to the financial service site Sentieo.

But Wendy’s stock has languished when compared with its peers among the largest restaurant chains. McDonald’s, for instance, is down just 9% on the year. Restaurant Brands International, owner of Burger King, is down 16.5%, as is KFC and Taco Bell owner Yum Brands. Wendy’s, however, is the smallest and least global of those names, relying mostly on the performance of its U.S. Wendy’s business for its revenues and profits.

In its statement, Wendy’s defended the performance of its business, which included the introduction of breakfast in 2020 and a bigger push to expand in international markets.

“As demonstrated by our recent first-quarter results, we continue to make meaningful progress against our three strategic growth pillars, reinforcing the strength and resiliency of the Wendy’s brand and driving robust AUV and sales increases,” the company said. “We remain focused on achieving our vision of becoming the world’s most thriving and beloved restaurant brand.”

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