Wendy’s Could Be Next for a Hostile Takeover — What Should You Do With Your Stock?

Logo illustrations in China - 09 Dec 2021
Budrul Chukrut / SOPA Images / Shutterstock.com

Over the past few months, the biggest rumor swirling around fast food retailer Wendy’s was when it was going to start selling the highly anticipated strawberry Frosty — its first new flavor in almost three years. However, now a potential takeover of Wendy’s led by prominent corporate raider Nelson Peltz might eclipse that delicious news, according to CNN.

Live Updates: Inflation and More Economic Updates
Explore: Surprising Things You Can Buy With Food Stamps

Peltz is already Wendy’s chairman and his management fund, Trian Partners, is the burger business’s largest stockholder. Back in May, Peltz said that Trian would be open to a sale or merger of the quick-service restaurant chain. However, it now appears likely that a deal more in line with Peltz’s aggressive business style is in the works.

Speaking at a Securities and Exchange Commission (SEC) filing on May 24, Peltz stated that he and Trian are considering a takeover to boost shareholder value maximization of Wendy’s, per CNN Business. CNN described Peltz as “an activist investor known for pushing under-performing companies to restructure, spin-off businesses and even break up.” He has previously pushed Proctor & Gamble and Mondelez to greater heights and looks to conceivably do the same for a stagnating Wendy’s.

Wendy’s had low growth in its 2022 first quarter, with a global sales increase of 2.4% at its restaurants open at least 15 months, according to CNN Business. Its sales growth didn’t meet market expectations and paled in comparison to its nearest competitors: McDonald’s and Burger King. The two hamburger giants had first-quarter sales growth of 11.8% and 10.3%, respectively, at its restaurants open at least a year.

Building Wealth

Related: 6 Alternative Investments To Consider for Diversification in 2022

A takeover by Peltz might bring good news for investors and franchisees. Although some market commentators like Zach’s have Wendy’s stock (WEN) listed as a firm “hold,” others, including MarketBeat, have the company as a consensus “buy” among its contributing analysts, noting the company’s strong forecasted upside and analyst interest.

Peltz is known for shaking things up, and that might be just what Wendy’s needs. The day after the SEC filing, investors saw an optimistic 11% jump in Wendy’s stock. In its press statement, Wendy’s said, “The Board will carefully review any proposal submitted by Trian Partners,” adding, “we remain focused on achieving our vision of becoming the world’s most thriving and beloved restaurant brand.”

Wendy’s isn’t the only acquisition Peltz is mulling over, as CNN reported that Peltz was also interested in taking over London-based consumer giant Unilever, which controls popular brands such as Dove soap, Hellman’s mayonnaise and Vaseline. Peltz has joined Unilever’s board of directors and currently holds a 1.5% stake in the company.

See: McDonald’s and 19 Other Franchises That Could Make You Rich
Find: The 8 Best Restaurant and Fast-Food Loyalty Programs

Founded in Columbus, Ohio in 1969 by Dave Thomas, Wendy’s is the world’s third largest hamburger chain behind McDonald’s and Burger King. A merger between it and Peltz’s Triarc Companies Inc. was completed in September 2008.

Building Wealth

More From GOBankingRates

About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.

Best Bank Accounts of July 2022

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.