Peltz's Trian makes $1.4 billion bid to take Wendy's private

what happened

Nelson Peltz's hedge fund Trian Fund Management has made an offer to acquire fast-food chain Wendy's for about $1.4 billion, according to people familiar with the matter, as reported by the Wall Street Journal. Trian is heading a group that proposed $7.35 per share in cash to take the company private.

Flynn Group, a restaurant operator, together with BlueFive Capital and Sixth Street Partners, is working alongside Trian. The bid is nonbinding and its details are expected in a regulatory filing later on Wednesday. The price implies a premium of roughly 20% to Tuesday's close, and Wendy's shares have fallen about 70% over five years after operational problems hurt traffic and earnings. Reuters reported that the stock rose about 15% premarket to $7.05.

why it matters

Trian argues that Wendy's needs heavy capital spending and that a multiyear turnaround would be easier to execute as a private company. Peltz holds roughly 16% alongside related parties and still has a board presence, so the board's response will matter to the market.

market impact

Wendy's shares: a cash buyout bid at a premium supports the stock

• ▲Wendy's shares pressure up — a cash buyout offer at a premium supports the share price

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