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Trian Fund Management LP,
’s largest shareholder, said it is exploring an acquisition or another potential deal for the fast-food restaurant, as it works to improve sales and deals with rising costs.
The activist hedge fund said it advised the fast-food restaurant chain’s board that it intends to explore and evaluate a potential transaction, alone or with third parties, to enhance shareholder value, according to a securities filing late Tuesday. A potential transaction could include an acquisition, merger or other deal that would result in control of Wendy’s, according to the filing.
Wendy’s shares jumped 17% to $19.08 in after-hours trading Tuesday.
Trian owns about 19.4% of the company, and is the company’s largest shareholder, according to the filing. Trian is led by billionaire founders
Mr. Peltz is chairman of Wendy’s board and Mr. May is vice chairman.
Wendy’s said its board will carefully review any proposal by Trian.
The company has been fighting to win more consumers by increasing the number of its locations and menu offerings, including through new chicken sandwiches. The chain started a new breakfast business just as the pandemic first hit, and has spent millions of dollars promoting and running it.
Wendy’s shares were down 32% this year, trailing rivals
and Burger King owner
Restaurant Brands International Inc.
The company told investors earlier this month that its traffic slowed in the three months ended April 3, and that lower-income consumers accounted for part of the drop-off. Sales among households earning less than $75,000 were weaker, Wendy’s executives said in an earnings call. The chain raised prices in its first quarter and intends to do so again in its current period, executives said.
Wendy’s, like other fast-food chains, is grappling with rising costs. The company has told investors that its commodity costs were increasing faster than expected, driven by higher beef prices. Restaurant-level profits decreased in its first quarter, primarily due to commodity increases, the chain said.
Trian, founded in 2005, first invested in Wendy’s predecessor company that year. Mr. Peltz had served as a director of Triarc Cos., Wendy’s previous business entity, starting in 1993, and has been a Wendy’s director since 2008.
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