Wendy’s board unanimously rejected a roughly $1.4 billion offer from a group led by Nelson Peltz’s Trian Fund Management. The group had offered $7.35 per share in cash to take the burger chain private. Wendy’s also adopted a one-year poison pill.
Board Rejects $7.35 Offer as Too Low
A committee of independent directors found the offer substantially undervalues
Wendy’s and does not reflect potential gains from the chain’s ongoing turnaround strategy, the company said in a press release on Thursday. The board said the proposal undervalues the company’s prospects and long-term earnings potential.
The board formed that committee in February, responding to a regulatory filing from Trian. Art Winkleblack, the board chair and a committee member, tied the decision to the chief executive.
Our confidence rests firmly in [CEO] Bob Wright’s proven track record of seasoned industry leadership, including restaurant business turnarounds.
Art Winkleblack, Wendy’s board chair and a member of the independent committee
Wendy’s Adopts Poison Pill After Trian Group Refuses Standstill
To guard against a hostile takeover, Wendy’s adopted a shareholder rights plan, known as a poison pill, with a one-year duration as of Wednesday, the company said.
The company added that the Trian-led group turned down a standstill agreement, which would have paused additional share purchases. That refusal fed into the decision to adopt the pill, per the company. Trian declined to comment.
Franchisee Joins Trian in Bidding Group
Besides Trian, the group includes BlueFive Capital, Sixth Street Partners and Flynn Group, one of Wendy’s largest franchisees. The offer was made Oct. 28.
Peltz’s history with the chain is long. His activist campaign there dates back more than two decades. In 2008, his company Triarc, which also owned Arby’s, bought Wendy’s in a $2.3 billion deal, and it later sold Arby’s, leaving Wendy’s standalone again.
Wendy's rejects takeover proposal from Nelson Peltz’s Trian https://t.co/ss2v0j2A0R
In 2024, Wendy’s named Peltz chairman emeritus after 17 years on its board. Trian executive Peter May and Peltz’s son, Bradley, still sit on the board.
Earnings Beat Estimates as Same-Store Sales Fall Again
Wendy’s also reported third-quarter results on Thursday. Same-store sales declined for the seventh straight quarter, though its quarterly earnings and revenue topped Wall Street’s expectations.
Shares slipped less than 1% in premarket trading. The offer had lifted the stock, which has lost about 60% of its value over the last three years.
Applebee’s owner Dine Brands recently adopted a poison pill to block a bid from Arkhouse Management and Cobblers Cove Capital.