Nelson Peltz’s Trian Fund Management on Wednesday made an offer to buy Wendy’s for roughly $1.4 billion in a move that would make the fast-food chain a privately held company.
Trian has been a long-term shareholder in Wendy’s, and Peltz’s hedge fund is leading a group that offered to buy the struggling fast-food giant at a price of $7.35 a share in cash.
The $1.4 billion bid to purchase Wendy’s is about a 20% premium over the company’s valuation of $1.2 billion at Tuesday’s market close.
The offer by the Trian-led group was confirmed by FOX Business and disclosed in a filing on Wednesday. The Wall Street Journal first reported on the offer.
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Wendy’s shares have fallen about 68% over the last five years as of Wednesday’s market open, though the stock surged nearly 17% on Wednesday morning following the news.
The Trian-led group bidding to buy Wendy’s includes restaurant operator Flynn Group along with investment firms BlueFive Capital and Sixth Street Partners.
The group said in a letter that making Wendy’s a private company would better allow it to carry out a complicated turnaround process that’s expected to take multiple years and entail major capital investment.
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“Wendy’s sits at a critical juncture. The external environment has become increasingly challenging given the significant pressures on the U.S. consumer , economic uncertainty, persistent commodity inflation and intensifying competition, particularly with the QSR burger category,” the group wrote.
“The business requires significant capital investment to de-lever and execute the strategic initiatives needed to turn system performance around,” it added.
