Wendy’s independent directors unanimously rejected an unsolicited $7.35 a share takeover proposal from a group led by Trian Partners on Thursday.
Zoom in: The investor group of Trian Fund Management, Flynn Group, BlueFive Capital and Sixth Street Partners offered $7.35 in cash for every Wendy’s share it does not already own.
- Wendy’s stock traded at $7.75 before Thursday’s open, above the offer price, and has slumped nearly 14% over the past 12 months.
Between the lines: The board adopted a limited-duration shareholder rights plan on November 4 that expires on November 3, 2027 and triggers if any person or group crosses 15% ownership without board approval.
- Directors noted that the investor group had turned down an offer to sign a customary standstill agreement.
By the numbers: US same-restaurant sales fell 5.7% in the third quarter and revenue slipped to $547 million from $549.5 million a year earlier.
What they're saying: "The Independent Committee thoroughly evaluated this Proposal and unanimously concluded that it substantially undervalues Wendy’s standalone prospects and long-term earnings potential," board chairman Art Winkleblack said.
Why it matters: Wendy’s is pinning its defense on a turnaround plan called Dave’s Way, so the chain has to deliver traffic growth while an activist investor and a 15% trigger hang over the stock.
