According to a report by The Financial Times, Nelson Peltz’s Trian Fund Management is assembling a consortium of investors that could include Flynn Group and Abu Dhabi-based BlueFive Capital.
- Trian disclosed in a filing with the U.S. Securities and Exchange Commission in February this year that Wendy’s was “undervalued.”
- The Financial Times also reported in May that Trian had discussed potential takeover financing with outside investors, including parties in the Middle East.
- Trian remains Wendy’s largest shareholder, while Trian executive Peter May and Bradley Peltz, Nelson Peltz’s son, sit on the company’s board.
Wendy’s Co. (WEN) shares surged on Wednesday after a report said Nelson Peltz’s Trian Fund Management is preparing a potential bid to take the U.S. burger chain private.
According to a report by The Financial Times citing people familiar with the matter, Trian is assembling a consortium of investors that could include Flynn Group and Abu Dhabi-based BlueFive Capital
Wendy’s shares were up nearly 16% in the morning session, with the stock rising to a high of more than a month. WEN was the top trending ticker on Stocktwits at the time of writing.
Peltz Builds Consortium For WEN Takeover
Trian, Wendy’s largest shareholder with a 16% stake, is working with potential co-investors on a take-private bid, according to the report. The group could include Flynn Group, one of Wendy’s largest franchisees, and Abu Dhabi-based BlueFive Capital.
Flynn Group operates 309 Wendy’s restaurants in the U.S., along with locations in Australia and New Zealand. Trian has also been speaking with outside investors about financing for a potential takeover, according to the report.
The group could submit an offer in the coming weeks, although the timeline could change and a bid may ultimately not materialize. If Trian makes a formal offer, Wendy’s independent directors would review the proposal and could negotiate with Trian or pursue a broader auction.
Trian’s Long History With WEN
Peltz’s relationship with Wendy’s dates back to 2005, when Trian launched an activist campaign, according to a Bloomberg report. Trian remains Wendy’s largest shareholder, while Trian executive Peter May and Bradley Peltz, Nelson Peltz’s son, serve on the company’s board.
Trian disclosed in a filing with the U.S. Securities and Exchange Commission (SEC) in February this year that Wendy’s was “undervalued” and said it was contacting potential co-investors about strategic alternatives. The Financial Times also reported in May that Trian had discussed potential takeover financing with outside investors, including parties in the Middle East.
“The board, together with the management team, regularly reviews the company’s strategic priorities and opportunities with the goal of maximising value for all shareholders,” Wendy’s said, according to the report, while adding that it would review any proposal submitted by Trian.
WEN Recently Brought In Industry Veteran In Turnaround Bid
Wendy’s appointed Steve Cirulis as its new Chief Financial Officer and Chief Strategy Officer in June this year, bringing the industry veteran over from Potbelly Sandwich Works, where he held the same roles.
Cirulis previously worked with Wendy’s CEO Bob Wright at Potbelly and was credited by Wright with contributing to the sandwich chain’s turnaround.
Wright said Cirulis’ experience across large-scale retail and restaurant brands would benefit Wendy’s from day one and help accelerate the company’s transformation efforts. The appointment comes as Wendy’s works to address declining sales and higher ingredient and labor costs.
What Retail Traders Think Of WEN Stock
Retail sentiment on Stocktwits around Wendy’s trended in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels at the time of writing.
WEN stock is up 5% year-to-date, but down 14% over the past 12 months. The iShares Core S&P Small-Cap ETF (IJR) is up 30% over the past 12 months, while the Vanguard Morningstar Small-Cap Value ETF (VBR) is up 23%.
The iShares S&P Small-Cap 600 Value ETF (IJS) is up 32% during this period, while the S&P 600 Small Cap Value ETF (SLYV) is up 31%.
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