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Bloomberg
Wendy’s Co surged in early trading after shareholder Trian Fund Management, the investment vehicle of billionaire Nelson Peltz, said it will explore a transaction that could give it control of the fast-food chain.
Trian owns about 11.8% of Wendy’s stock, according to data compiled by Bloomberg. A transaction “could include an acquisition, business combination (such as a merger, consolidation, tender offer or similar transaction) or other transaction,†Trian said in a filing.
Peltz, who currently serves as chairman of Wendy’s, has been a longstanding shareholder.
In a statement, Dublin, Ohio-based Wendy’s said its board “will carefully review any proposal†submitted by Trian.
Citigroup Inc analyst Jon Tower said he isn’t surprised that Wendy’s biggest shareholder “is making noise†because the stock has been lagging behind peers for years.
“Keep in mind, this is a similar ownership group that acquired the brand in 2008 and has served on the board throughout the company’s history,†Tower said.
Fast-food chains are facing more pressure amid staggering inflation as consumers start to tighten their budgets. Larger restaurant companies that are more diversified may be more insulated from pressures for one commodity, such as beef, which Wendy’s called out on its latest earnings call. Additionally, legacy brands have started looking at smaller concepts for growth potential.