Wendy's shares jump 15% as Nelson Peltz's Trian offers $1.4 billion to buy burger chain - CNBC
A group of investors led by Nelson Peltz's Trian Fund Management has offered $1.4 billion to buy Wendy's, according to a regulatory filing Wednesday.
The group has offered $7.35 per share in cash to take the burger chain private, paying a 20% premium to Tuesday's closing price. In addition to Trian, it includes investment firms BlueFive Capital and Sixth Street Partners, plus Flynn Group, one of Wendy's largest franchisees.
Wendy's shares spiked about 15% in morning trading following the offer. The Wall Street Journal first reported Peltz's proposal.
Wendy's did not immediately respond to a request for comment from CNBC. Trian declined to comment beyond the filing.
The take-private deal offer comes after a tough two-year stretch for the burger chain. Wendy's stock has tumbled 65% over that period, including Wednesday's gains. For six straight quarters, the company has reported same-store sales declines.
Wendy's is scheduled to report its third-quarter earnings before the bell on Nov. 5.
Wendy's challenges have made the company a cheaper acquisition target for Peltz, whose history with the brand dates back to an activist campaign he led more than two decades ago.
Budget-conscious diners have been eating out less often, and Wendy's and its rivals have leaned into discounts to lure consumers into restaurants. Wendy's has also dealt with a revolving door of chief executives, who have had different ideas about turnaround strategies for the struggling chain.
"In our view, a take private makes sense as Wendy's turnaround is likely to be prolonged given the challenged state of the lower income consumer and soft state of the quick service burger category," TD Cowen analyst Andrew Charles wrote in a note to clients on Wednesday.
In May, former Potbelly CEO Bob Wright joined Wendy's as its latest chief executive, after his former employer went private. In his first earnings conference call with analysts in August, he was candid about what he views as the chain's biggest issues, like muddled value offerings, inconsistent execution at its restaurants and too many one-off promotions.
Trian previously explored a takeover of Wendy's in 2022, but later decided against it. The firm and affiliated parties own a 16.25% stake in Wendy's, according to the regulatory filing, making them the company's largest shareholder.
