Wendy's board on Wednesday adopted a one-year shareholder rights plan and said an independent committee had unanimously rejected a $1.4 billion buyout proposal from a group led by activist investor Nelson Peltz's Trian Partners, setting up a standoff over the fast-food chain's future.
The investor group — Trian Fund Management, Flynn Group, BlueFive Capital and Sixth Street Partners — had offered $7.35 a share in cash on Oct. 28 for all Wendy's stock it did not already own, a roughly 20% premium at the time. Trian is Wendy's largest outside shareholder, with a 16.3% stake.
The committee, which is not affiliated with Trian, said in a filing with the Securities and Exchange Commission that the proposal "substantially undervalues" Wendy's standalone prospects and does not reflect the value it expects the company's "Dave's Way" turnaround plan to generate. "The offer does not reflect the value we expect the plan to deliver," said Art Winkleblack, the board's chairman and a member of the independent committee, who added confidence in the leadership of President and Chief Executive Bob Wright.
The board's new rights plan, adopted Nov. 4 after the investor group declined to sign a standstill agreement, gives shareholders of record on Nov. 16 one right per share. The rights become exercisable only if an outside party acquires 15% or more of Wendy's stock without board approval, and the plan is set to expire on Nov. 3, 2027, or sooner if the board chooses to end it.
Not everyone welcomed the rejection. Shareholder Blackwells Capital had urged the board to turn down the bid but separately questioned the independent committee's objectivity, arguing the offer undervalues the chain and noting that Trian would retain its existing stake under the structure it proposed, according to Nation's Restaurant News.
Morgan Stanley is advising the independent committee, with Simpson Thacher & Bartlett as legal counsel. Trian had weighed and backed away from previous attempts to take Wendy's private, including in 2022 and 2023; Wednesday's rejection leaves open whether the investor group will return with a sweetened offer or escalate the fight directly to shareholders.