Largest Shareholder of Wendy’s Exploring Buying Fast Food Chain Amid Rising Costs

The sign for a Wendy’s restaurant is seen in Ft. Lauderdale, Fla., on Jan. 8, 2002. Joe Raedle/Getty Images

Fast-food chain Wendy’s may be up for sale as the restaurant struggles with rising commodity and labor costs.

According to a May 24 filing with the U.S. Securities and Exchange Commission, The Wendy’s Company Chairman Nelson Peltz said that his management fund, Trian Partners, wants to explore a possible sale or merger for the restaurant chain.

Trian Fund Management owns 19 percent of the company and is the largest shareholder.

“Such a potential transaction could include an acquisition, business combination such as a merger or other transaction that would result in the acquisition of control of the company by the filing persons,” the Schedule 13D/A states.

In a statement posted to its website on May 24, Wendy’s said its board of directors would carefully consider any proposals submitted by Trian Partners “consistent with its fiduciary duties.”

“The Wendy’s Company’s Board of Directors and management team regularly review the Company’s strategic priorities and opportunities with the goal of maximizing the value for all stockholders,” the company said in a statement. “Our board is committed to continuing to act in the best interests of the Company and its stockholders.”

The move by Peltz, who has been a director at the company since 2008, saw Wendy’s stocks jump 15 percent in after-hours trading on May 25. Stocks are currently trading up 9.77 percent.

Wendy’s said in its first-quarter earnings report earlier in May that it experienced 4.2 percent global sales growth for the first three months of 2022, down from 12.5 percent growth for the same period in 2021.

The company reported global sales of approximately $3.1 million in the first quarter of 2022, up from $2.951 million in sales in 2021. However, the company noted that it had experienced higher operating costs tied to increased commodity and labor costs, and the impact of its investment toward opening 50 restaurants in the United Kingdom this year.

Net income fell to $37.4 million in the first quarter, down nearly 10 percent compared to the same period last year.

“We had one of our best quarters in our history for unit growth, with over 90 new restaurant openings, and are on track to reach our planned net unit growth goal of 5 to 6 percent for the year,” President and CEO Todd Penegor said during the earnings call.

Penegor also noted that the fast-food chain was “well-positioned to win in this volatile environment,” thanks to the “strong franchisee alignment behind its strategies” and a “strengthened balance sheet with the successful debt raise transaction we recently completed.”

“With sustained focus on executing against our key priorities, we are confident we will achieve our vision of becoming the world’s most thriving and beloved restaurant brand.”

Wendy’s was founded by Dave Thomas in Columbus, Ohio, in 1969. The company has approximately 7,000 restaurants worldwide.