Nelson Peltz-led group offers to buy Wendy’s for $1.4B

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.

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