Wendy’s shares surged 15% at the opening bell Wednesday after investor Nelson Peltz proposed a buyout. Peltz’s Trian Fund Management and partners offered $7.35 per share in cash, a nearly 19% premium over Tuesday’s closing price. The deal would take the fast-food chain private, which has been grappling with high beef prices, aging stores, and fierce competition.
Wendy’s, founded in 1969 and known for its square burgers and Frosty desserts, has seen its U.S. burger chain sales share drop from 11.5% in 2019 to 10.4% last year. Inflation has also hurt the company, as rising labor, food, and packaging costs have driven away lower-income consumers. Wendy’s has been closing underperforming locations, shuttering 240 restaurants in 2024 and planning to close up to 358 this year.
Last month, one of Wendy’s largest franchisees, Meritage Hospitality Group, filed for bankruptcy protection after the chain tried to terminate its franchise agreement. In a letter to the company’s board, Peltz argued that going private would be the best outcome for all stakeholders, citing economic uncertainty, commodity inflation, and intensifying competition in the quick-service burger category.
Peltz, who has invested in companies like Procter & Gamble and Disney, holds a 16.3% stake in Wendy’s. Analyst Andrew Charles of TD Cowen noted that an independent special committee will evaluate the proposal. Wendy’s is set to report its quarterly financial results next week, with analysts expecting earnings of 9 cents per share on sales of $531 million. Shares rose 88 cents to $7.01 Wednesday, down 26% since the start of the year.