Peltz, An Investor in Wendy's, Considers Acquiring A Burger Franchise

Nelson Peltz, the largest shareholder of Wendy's Co and a billionaire hedge fund manager, is investigating a potential takeover play for the burger chain, a regulatory filing revealed on Tuesday, nearly two decades after he first invested in the company.

In extended trading, Wendy's (NASDAQ:WEN) shares increased by almost 14 percent after Trian Fund Management, Peltz's firm, announced that it will investigate a deal on its own or with others that might include an acquisition, business combination, or other transaction.

Refinitiv records indicate that the business holds 11.82 percent of Wendy's shares, while Peltz owns 4.86 percent and Trian's president, Peter May, owns 2.7%.

Tuesday's closing price of $16.20 for Wendy's shares is a 32% decrease since January.

Wendy's stated in a statement that its board "will carefully consider any proposal offered by Trian Partners" and is dedicated to acting in the company's and shareholders' best interests.

Peltz is the current chairman of Wendy's board, while May, who is also a founding partner of Trian, serves as non-executive vice chairman, and Matthew Peltz, Nelson's son and Trian colleague, is a board member.

After Peltz and Trian, one of the most respected activist investors in the sector, initially invested in Wendy's in 2005 and began pressing for change in late 2008, the company, which is currently valued at $3.6 billion, has a lengthy relationship with the firm.

In 2008, Wendy's merged with Triarc Companies, a subsidiary of Trian and the parent company of Arby's Restaurant Group. In 2011, Arby's was sold to Roark Capital Group after a merger that lasted less than three years.

According to Trian, it pushed for an operational turnaround focused on enhancing and expanding the Wendy's brand.

Trian announced on Tuesday that it has hired financial and legal experts and informed the board of its objectives. The company's spokesperson declined to comment beyond the filing.

In May, the burger chain's quarterly results fell short of market forecasts due to the impact of severe storms and frigid weather across the United States on shop traffic and breakfast item demand.

Strategic and financial buyers see ample prospects for mergers at a time when the wider market is hovering around bear territory due to fears of inflation and rising interest rates, which have depressed the stock prices of many companies.