Wendy's rejects $1.4 billion takeover proposal from Nelson Peltz’s Trian

Summary

• Wendy's rejected a $1.4 billion takeover offer from an investor group led by Nelson Peltz's Trian Fund Management.
• The group proposed $7.35 per share in cash on Oct. 28 to take the company private.
• The investor group includes BlueFive Capital, Sixth Street Partners, & Flynn Group.
• An independent board committee determined the proposal substantially undervalues Wendy's & ignores potential gains from its turnaround strategy.
• Board chair Art Winkleblack cited confidence in CEO Bob Wright's leadership & track record of restaurant turnarounds.
• Wendy's adopted a one-year shareholder rights plan, or poison pill, to prevent a hostile takeover.
• The investor group rejected a standstill agreement that would have paused additional share purchases.
• This rejection continues a long-running relationship between Peltz & Wendy's, including a 2008 acquisition by his company Triarc for $2.3 billion.
• Peltz served as chairman emeritus after 17 years on the board, & his son Bradley & Trian executive Peter May remain on the board.
• Wendy's reported third-quarter results showing a seventh consecutive quarter of declining same-store sales.
• Quarterly earnings & revenue for the third quarter exceeded Wall Street expectations.
• Wendy's shares fell less than 1% in morning trading after the stock had lost about 60% of its value over the last three years.
• Dine Brands, owner of Applebee's, recently adopted a poison pill to block a takeover bid from Arkhouse Management & Cobblers Cove Capital.