Wendy’s rejected a $1.4 billion buyout from billionaire Nelson Peltz’s Trian Fund Management, claiming that the offer “substantially undervalues” the company and adopting a “poison pill” plan to defend the company from a hostile takeover.
The burger chain’s board unanimously opposed the offer that would have taken the company non-public after years of declining gross sales and franchise closures.
“The Independent Committee thoroughly evaluated this proposal and unanimously concluded that it substantially undervalues Wendy’s standalone prospects and long-term earnings potential,” said Board Chairman Art Winkleblack.
A Wendy’s restaurant operates inside Tampa International Airport in 2024. Christopher Sadowski for NY Post
Shares rose more than 2% after a better-than-expected earnings report on Thursday.
Peltz’s hedge fund – which already owns 16% of the company – was prepared to take the burger chain non-public at $7.35 per share saying it was at a “critical juncture” and claiming that a multi-year overhaul would be simpler to do off the market.
The announcement last week despatched the stock hovering 16%. The hedge fund also made a hostile takeover attempt of the company in 2022.
The board adopted a shareholders’ proper plan on Thursday that would grants shareholders the proper to buy shares at a low cost if a particular person owns more than 15% of Wendy’s shares — defending the company from another takeover attempt.
Nelson Peltz speaks at the FII Institute Priority Summit in Miami, Florida, on Thursday, March 30, 2023. Bloomberg via Getty Images
Peltz’s son Bradley is a board member, and he also operates about 90 franchises in New York and New Jersey, along with Pennsylvania, according to the Wall Street Journal.
CEO Bob Wright, who joined the Frosty-serving chain in May, is assured in his turnaround strategy.
Wright – who managed to revive gross sales at the Potbelly Sandwich Works chain – faces a stock that has dropped 24% this yr and has plummeted more than 70% over the previous six years.
A Wendy’s fast food restaurant in Paterson, N.J. in 2020. Christopher Sadowski for NY Post
“We will rebuild the menu at the ingredient level, at the menu item level, and the category level, while also addressing the menu price architecture that brings value to our customers,” said Wright.
Wendy’s closed 240 eating places in 2024 and has plans to close 358 chains in 2026.
One of the company’s largest franchisees filed for chapter safety in September.
Wendy’s has more than 7,000 places worldwide.