Wendy’s Rejects Trian’s $1.4 Billion Buyout Offer

The board committee reviewing the offer said Thursday that Wendy’s strategy could strengthen market share and performance through better food quality and value, store upgrades, marketing and digital sales. Chief Executive Bob Wright, who took the helm in May, is leading the plan. Trian made its offer last week, arguing Wendy’s was “at a critical juncture” and would be better off as a private company.

Nelson Peltz’s firm, together with related parties, holds roughly 16% of Wendy’s and has a presence on its board. Peltz’s son, Bradley, is a director and operates Wendy’s restaurants in New York, New Jersey and Pennsylvania, according to the company’s website. Earlier this year, Peltz and others associated with Trian disclosed in a securities filing that they had discussed strategic options with potential investors, including taking control of Wendy’s and taking it private. Trian pushed for strategic options, including a possible sale, in 2022, then backed off in 2023.

Wright has told franchisees and investors that Wendy’s cut ingredient quality to save costs, service had become uneven and the company relied too heavily on deals, The Wall Street Journal reported in August. The problems contributed to Wendy’s losing its No. 2 position among major U.S. burger chains by sales to Burger King. Last week, Burger King said its U.S. turnaround was gaining traction.

The rejected offer comes as Wendy’s reported lower third-quarter profit and revenue. Net profit fell to $15.1 million, or 8 cents a share, from $44.3 million, or 23 cents, a year earlier. Adjusted earnings were 13 cents a share, above FactSet analysts’ estimate of 9 cents. Revenue declined 0.5% to $547 million, compared with the $531.3 million analysts expected. Global systemwide sales fell 5.9%, primarily because of lower U.S. same-restaurant sales. Wendy’s withdrew its annual outlook in August, saying new management needed time to assess opportunities and develop a comprehensive turnaround plan. It also cut its quarterly cash dividend to 7 cents a share from 14 cents.