Wendy's Tells Nelson Peltz to Take His $7.35 and Hit the Drive-Thru

Wendy's board unanimously rejected an unsolicited take-private proposal from an investor group led by Nelson Peltz's Trian Fund Management, joined by Flynn Group, BlueFive Capital, and Sixth Street Partners. The group offered $7.35 a share in cash for the stock it doesn't already own, a bid other outlets have priced at roughly $1.4 billion in total. Board chairman Art Winkleblack said the independent committee "unanimously concluded that it substantially undervalues Wendy's standalone prospects and long-term earnings potential," and tied the no to Dave's Way, the turnaround plan CEO Bob Wright rolled out alongside third-quarter earnings.

To back up the rejection, the board adopted a one-year shareholder rights plan, better known by its more honest name: a poison pill. It took effect immediately and expires November 3, 2027, and it triggers if anyone acquires 15% or more of Wendy's stock without board approval, letting every other shareholder buy in at a discount while the trigger-happy buyer's own rights go void. Wendy's says it offered the investor group a standstill agreement first; the investor group declined it.

This isn't Peltz's first run at Wendy's, and the proposal landed by regulatory filing in late October, which is what set the special committee's clock running in the first place. Whether the group comes back with a richer number is the only question left standing; for now, the board is betting its own turnaround is worth more than Peltz's $7.35.

Source: Wendy's Co.

Kyle Duford, Founder & Editor, BRNDWIRE. More from Kyle →