How two notorious activist investors would fix McDonald’s

If Trian Management’s Nelson Peltz wasn’t the chairman of Wendy’s, he might be tempted to pitch in on a McDonald's MCD -1.57% makeover.

At Wednesday’s CNBC/Institutional Investor Delivering Alpha Conference in Manhattan, Peltz said he wasn’t inclined to give any tips to a rival, but that under different circumstances he’d be intrigued by the possibility of a turnaround at the Big Mac chain, given the financial firepower of its balance sheet and its massive global footprint. It would take a lot of work though.

“The mindset of that company has to be turned upside down and I don’t know if they have the stomach to do it,” Peltz said. “It’s going to take years…and I don’t know if shareholders will be patient enough.”

Peltz was joined in the conference’s opening panel by fellow billionaire hedge fund manager Bill Ackman, who noted that he pitched McDonald’s on a plan to franchise the bulk of its locations about a decade ago.

McDonald’s took some steps in that direction, but Ackman’s Pershing Square would go on to find a more receptive candidate for the maneuver in Burger King. That chain “was in a much worse place than McDonald’s is today,” Ackman said Wednesday. “The store base was a disaster, they had something like 13 CEOs in 25 years” and same-store sales were a mess. Still, any company that can survive a few decades of mismanagement and still be in business is worth considering, and when Pershing was presented with the opportunity by private equity firm 3G Capital they jumped on board and haven’t looked back.

Over the last year, while McDonald’s has fallen 2%, Wendy’s is up 27% and Burger King parent Restaurant Brands International has gained 17%.

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