Nelson Peltz’s Trian Fund Management has no immediate plans to pursue a take-private transaction for Wendy’s, despite having explored a potential bid for the US burger chain, according to a report by Reuters citing unnamed people familiar with the matter.
Trian, which owns about 16% of Wendy’s, had been reported earlier this month to be preparing a possible offer alongside a group of investors that included BlueFive Capital and Flynn Group, one of the restaurant chain’s franchisees.
The prospect of a takeover sent Wendy’s shares soaring 14.7% on 12 August. The stock continued to climb in the days that followed, reaching a roughly nine-month high and putting the company’s market capitalisation at about $1.7bn.
Shares fell more than 14% in after-hours trading on Wednesday after news emerged that Trian was no longer planning to make an offer at this stage.
Trian remains concerned about Wendy’s recent performance, its share price and valuation, as well as the direction of the company’s strategy, according to the sources. However, the investment firm is keeping its options open and could revisit its position in the future.
Trian reportedly declined to comment, while Wendy’s did not immediately respond to requests for comment.
Trian’s decision to step back from a potential acquisition could give newly appointed Wendy’s CEO Bob Wright additional time to implement a turnaround strategy.
Wright took over as chief executive in May and is the fourth person to lead the Dublin, Ohio-based company in three years. The chain has been struggling with weaker sales and recently lost its position as the second-largest US burger chain by sales.
Despite a recent rally fuelled by takeover speculation, Wendy’s shares remain about 60% below their level of five years ago.
Trian has maintained a close relationship with Wendy’s for almost two decades. Trian co-founder Peter May spent 18 years on the company’s board, while Bradley Peltz, Nelson Peltz’s son, joined the nine-member board last year. Nelson Peltz and another son, Matthew, have also previously served as directors.
