Shares of Wendy’s jumped more than 14% Wednesday after high-profile investor Nelson Peltz made an offer to buy the chain, which has been struggling with high beef prices and aging stores.
Peltz’s Trian Fund Management and several partners are offering Wendy’s $7.35 per share in cash, a nearly 19% premium to the stock’s closing price Tuesday, in a deal that would strip the company of its value.
Wendy’s, headquartered in Dublin, Ohio, confirmed Wednesday that it had received the unsolicited proposal in a statement and said its board of directors had formed an independent committee to evaluate it. At the end of last year, Wendy’s had 5,969 restaurants in the United States and 1,428 locations in 38 countries.
Wendy’s, founded in 1969 by Dave Thomas and named for his daughter, is known for its square burgers and frozen desserts. The fast-growing chain introduced drive-thru service in 1970 and went public in 1976. In the 1980s, while competing for sales with McDonald’s and Burger King, Wendy’s introduced salad bars and introduced its iconic “Where’s the Beef?” advertising campaign.
But as the fast food market became even more competitive and rival burger-focused chains like In-N-Out and Five Guys expanded, Wendy’s fell behind. Wendy’s share of the burger chain’s U.S. sales fell from 11.5% in 2019 to 10.4% last year, according to Technomic, a market research firm.
In recent years, inflation also hurt Wendy’s and other U.S. fast-food chains, which have seen traffic from low-income consumers decline as they raise their prices to combat rising labor, food and packaging costs.
Wendy’s said Wednesday it is moving “with urgency” to rebuild its menu with a focus on quality and improving marketing and store operations. Wendy’s hired Bob Wright, who previously led Potbelly, as president and CEO in May. He is the fourth CEO to lead the company since 2024.
Wendy’s was closed obsolete American restaurants so it can focus on its most profitable locations. The company closed 240 restaurants in 2024 and announced earlier this year that it planned to close up to 358 locations in 2026.
Then, last month, one of Wendy’s largest U.S. franchisees filed for bankruptcy after the chain attempted to terminate its franchise agreement. Michigan-based Meritage Hospitality Group operates 314 Wendy’s restaurants in 15 states.
In a letter to the company’s board of directors, Peltz said privatization “will produce the best results for all stakeholders.”
“Wendy’s is at a critical juncture,” Peltz wrote. “The external environment has become increasingly challenging given significant pressures on the U.S. consumer, economic uncertainty, persistent commodity inflation and intensifying competition, particularly in the QSR (quick service restaurant) hamburger category.”
Peltz has invested in companies ranging from Procter & Gamble to Disney to DuPont. According to a regulatory filing filed Wednesday, Trian’s stake in Wendy’s stands at 16.3%.
Peltz considered a takeover bid for Wendy’s in 2022, but told the company in January 2023 that he decided against it, citing improving business momentum, according to Andrew Charles, an analyst at TD Cowen.
Charles said an independent special committee should evaluate the proposal and the two sides have a confidentiality agreement.
“In our view, going private makes sense as Wendy’s turnaround is likely to be protracted given the plight of the low-income consumer and the weakness of the quick-service burger category,” Charles wrote in a note to investors Wednesday.
Wendy’s is expected to release its quarterly financial results next week. Analysts expect the company to post earnings of 9 cents per share on revenue of $531 million, according to FactSet.
Shares rose 89 cents to $7.03 on Wednesday. They have fallen 26% since the start of this year.
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