Shares of The Wendy’s Co. (NASDAQ:WEN) jumped 15% Wednesday after The Wall Street Journal reported Nelson Peltz’s Trian Fund Management has offered to buy the fast-food chain for about $1.4 billion.
In an amended filing with the SEC on Wednesday, Trian said it is leading a group offering $7.35 per share in cash for the company, representing a roughly 20% premium to Tuesday’s close and requiring no new debt.
The offer follows months of on-and-off takeover chatter. Peltz has circled the company for years.
- WEN stock is climbing on the news. Get all the details and price action here.
A Long History With Wendy’s
Peltz’s relationship with Wendy’s dates back to an activist campaign he led more than two decades ago. Trian executive Peter May and Bradley Peltz, one of Nelson Peltz’s sons, also sit on Wendy’s board.
A February regulatory filing showed Trian with a 7.85% stake and Peltz with a 16.24% interest, and the same filing called the stock “undervalued.”
A buyout has been floated before. Trian considered taking Wendy’s private in 2022 and then backed away from those plans in 2023.
The latest push began in May. The stock surged after reports said Trian was rallying support for a bid to take the chain private, with Trian reportedly holding discussions with outside investors, including some in the Middle East, about financing a deal.
Momentum picked up in August. Reuters reported Trian was working on a bid with a consortium including Bugatti-backed BlueFive Capital and Wendy’s franchisee Flynn Group, and the news sent the stock up again Wendy’s said at the time it would review any Trian proposal in line with its fiduciary duties.
Two weeks later, the deal appeared dead. Reuters reported Trian had no plans to make a take-private bid, citing concerns about Wendy’s trading price, valuation multiples and strategic direction. Wendy’s shares fell 14% to $7.76 the next morning.
Short Sellers and Past Squeezes
Short sellers have a lot riding on Wednesday’s news with short interest standing at 35.87% of the float, per Benzinga Pro market data.
Wendy’s has already been through one squeeze this year. On June 24, trading was briefly halted for volatility, and the stock later hit $8.89 before closing up 25.7% at $7.86.
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Top Momentum Stocks
A WallStreetBets post titled “We need to save Wendy’s” drew heavy engagement. The gain marked the stock’s biggest advance since June 2021, the last time Reddit traders piled into the name.
Short interest in Wendy’s stock continued to climb even higher around the August bid reports. Benzinga Pro data showed 43.30% of the float sold short, setting up conditions for a squeeze if a real offer arrived at a premium.
A Turnaround Still in Progress
The business itself remains under pressure. New CEO Bob Wright has rolled out a five-point plan to revive sales, and even with takeover speculation propping up the stock, shares still trade about 60% below their level five years ago.
WEN Stock Price Activity: Wendy’s stock was up 15.47% at $7.09 during premarket trading Wednesday, according to Benzinga Pro market data.
Photo: PJ McDonnell / Shutterstock
