A Wendy’s shareholder urged the company to reject a $1.4 billion buyout offer from Nelson Peltz, saying that it lacks protections against an insider-driven transaction and undervalues the fast-food chain.
Trian Fund Management, Peltz’s hedge fund, along with mega-franchisee Greg Flynn and a pair of investment firms, have offered $7.35 per share for the company. But that price is still 10% lower than the company’s stock price at the outset of the year.
Blackwells Capital, a New York-based investment firm that is a shareholder in the company, said that Peltz himself played a role in the conditions that led to a steep decline in Wendy’s stock price. Peltz served as chairman for 17 years and is still Wendy’s chairman emeritus. His partner, Peter May, and son Matthew Peltz are both company directors.
“Wendy’s has cycled through four chief executives in under three years, cut its dividend by 72%, posted six consecutive quarters of declining same-store sales, watched its largest franchisee enter bankruptcy, and surrendered the No. 2 position in American burgers,” Blackwells said in a statement. “These are not conditions Trian discovered. They are conditions Trian presided over. This is an offer by the company’s longest tenured fiduciary to purchase, at the bottom, the consequences of his own disastrous tenure.”
Peltz stepped down as chairman in 2024.
In February, the investor revealed he was looking at potentially buying the chain and reports over the summer said that he was working with Flynn and other groups on a deal. That sent the company’s shares soaring past $9. But by late August Peltz and Trian backed off, opting against the purchase.
Blackwells noted that the company’s stock afterward plunged at their steepest rate since March 2020 and never recovered, falling another 20%. With Wendy’s shares under $7, Trian made another bid.
Blackwells in its statement said that Wendy’s shareholders “are entitled to a process that tests whether $7.35 is what Wendy’s is worth.”
The firm also questioned the proposal’s terms, noting that Trian is proposing to keep the 16.3% of Wendy’s shares it owns, rather than sell on the terms as other shareholders, so the transaction can close with less support.
Wendy’s has formed a special committee to evaluate the deal and has hired Morgan Stanley as a financial adviser. But Blackwells said there is no condition to ensure that the sale is approved by a majority of the shareholders being bought out.
The firm also questioned the potential independence of any special committee. “Mr. Peltz chaired this board for 17 years and has sat on it for more than three decades,” the firm said. “Every current director was either nominated to a board he led or has served for years alongside the directors he installed.
“Independence is a matter of relationships, not of committee charters, and a committee drawn from this boardroom is not independent of Trian in any sense that matters.”
Blackwell wants Wendy’s to reject the deal. The firm said that any transaction involving Peltz should carry protections from a takeover by company insiders, and any deal should feature a test of what Wendy’s is worth to buyers outside the company. The firm also said it “intends to pursue every avenue available to shareholders, within the proxy process, the company’s documents, and applicable law, to ensure that this transaction does not proceed on these terms.”
The firm also wants the sale price to match the $17 per share price in 2019, when Trian last sold Wendy’s shares.
“Seventeen years of Nelson Peltz’s chairmanship left Wendy’s with a board seated by nepotism and cronyism, four CEOs in under three years, and a dividend cut of 72%,” Jason Aintabi, chief investment officer for Blackwells, said in a statement sent to Nation’s Restaurant News. “That is not a company being run to win. It is a company being run to be sold. Mr. Peltz will not be permitted to buy back his own wreckage at $7.35 — or any price that is not a premium to the more than $17 his funds collected in their last reported sale of Wendy’s stock. That is the floor. Anything beneath that is not an offer, it is an appraisal of what he mistakenly believes the public will tolerate.”
