TLDR
- Wendy’s (WEN) stock rose about 14% Wednesday after Trian Fund Management offered $1.4 billion to take the chain private.
- The all-cash offer is $7.35 a share, a 20% premium to Tuesday’s close.
- Trian is joined by BlueFive Capital, Sixth Street Partners and franchisee Flynn Group.
- Trian and affiliates already own 16.25% of Wendy’s, making them the largest shareholder.
- Wendy’s reports third-quarter earnings before the bell on Nov. 5.
Wendy’s (WEN) stock was up $0.85, or 13.76%, in Wednesday morning trading. The move came after Trian Fund Management made a $1.4 billion offer to take the company private.
The group is offering $7.35 a share in cash. That is a 20% premium to Tuesday’s closing price.
Trian is joined by BlueFive Capital and Sixth Street Partners. Flynn Group, one of Wendy’s largest franchisees, is also part of the bid.
The Wall Street Journal first reported the proposal. A regulatory filing confirmed it Wednesday morning.
Wendy’s did not immediately respond to a request for comment from CNBC. Trian declined to comment beyond the filing.
Trian Already Holds the Largest Stake
Trian and affiliated parties own 16.25% of Wendy’s, according to the filing. That makes them the company’s largest shareholder.
Peltz’s history with the brand goes back more than two decades to an activist campaign. Trian also explored a takeover in 2022 but decided against it.
Trian’s view is that a multi-year turnaround is easier away from the quarterly scrutiny of public markets. The group believes Wendy’s needs substantial capital investment.
TD Cowen analyst Andrew Charles said a take-private makes sense. He pointed to a prolonged turnaround, a challenged lower income consumer and a soft burger category.
A Rough Two Years for the Burger Chain
Wendy’s stock has fallen 65% over two years, even after Wednesday’s gain. The company has reported six straight quarters of same-store sales declines.
Budget-conscious diners are eating out less often. Wendy’s and its rivals have leaned on discounts to bring them back.
The chain has also gone through a revolving door of chief executives. Each had different ideas on how to fix it.
Bob Wright, the former Potbelly CEO, joined in May. On his first earnings call in August, he cited muddled value offers, inconsistent restaurant execution and too many one-off promotions.
Deal talk briefly lifted the stock in August before it fell back. The company has also dealt with a major franchisee bankruptcy and a dividend cut.
The S&P 500 was up 0.3% before the open. A Federal Reserve rate decision is due at 2:00 p.m. ET.
The offer is nonbinding. Wendy’s is scheduled to report third-quarter earnings before the bell on Nov. 5.
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