Wendy’s Rejects $1.4 Billion Take-Private Offer From Trian-Led Group

Wendy’s rejected a $1.4 billion offer from a group led by Trian Fund Management to buy the company and take it private. The group proposed paying $7.35 in cash per share, but an independent board committee said the price was substantially below the company’s value.

Alongside the rejection, Wendy’s adopted a limited-term shareholder rights plan. It aims to prevent an investor from acquiring more than 15% of the company without board approval. If triggered, the plan would let existing shareholders buy shares at a discount, diluting the stake of an investor seeking control.

Trian and related parties hold 16.3% of Wendy’s shares, according to a regulatory filing. Nelson Peltz’s group is working with restaurant operator Flynn Group and investment firms BlueFive Capital and Sixth Street Partners.

The offer comes as Wendy’s pursues a recovery plan under new CEO Bob Wright. U.S. comparable restaurant sales fell 5.7% in the third quarter, while adjusted earnings were 13 cents per share, above expectations. The company had also withdrawn its annual outlook and cut its dividend, the article reported.

Wendy’s also signed a letter of intent to buy up to 163 restaurants from franchise operator Meritage Hospitality Group. The company has made breakfast optional at its U.S. restaurants as it focuses on lunch, dinner and late-night meals.

At Friday’s close, Wendy’s shares traded at $8.15, up 2.64% from the previous close. Zacks strategist Andrew Rocco said Trian could raise its offer, seek shareholder support to change the board, or back the company’s recovery plan.