Wendy’s rejects 2 trillion won takeover offer, saying the price is too low

【Lee Byung-cheol, Financial News correspondent in New York】Wendy’s, a leading U.S. hamburger chain, has rejected a $1.4 billion (about 2 trillion won) takeover offer from an investor group led by activist investor Nelson Peltz. Its business has continued to struggle, with same-store sales declining for seven consecutive quarters, but Wendy’s judged that the offer price was too low given its ongoing turnaround strategy.
Wendy’s said in a statement on the 5th (local time) that it had decided not to accept the takeover offer from an investor group that included Trian Fund Management, led by Peltz.
Earlier, on the 28th of last month, an investor group led by Trian proposed acquiring all of Wendy’s shares for $7.35 per share in an all-cash deal. The plan was to delist Wendy’s from the stock market and take it private through the acquisition.
In addition to Trian, the acquisition consortium included investment firms BlueFive Capital and Sixth Street Partners, as well as Flynn Group, one of Wendy’s major franchise operators.
Wendy’s board established a special committee composed of independent directors last February to review Trian’s potential takeover offer. The committee concluded that the offer significantly undervalued Wendy’s.
In particular, it concluded that although the ongoing turnaround strategy could lead to improved results in the future, the offer price did not adequately reflect that potential value.
Trian did not issue a separate statement on Wendy’s decision to reject the takeover offer.
Wendy’s business situation remains challenging. Results for this year's third quarter, released alongside the announcement that day, showed that same-store sales had declined for seven consecutive quarters. The prolonged sales decline at existing restaurants has made a turnaround an urgent priority.
However, third-quarter revenue and earnings both exceeded Wall Street expectations. The better-than-expected results helped sustain expectations for the company’s ongoing business-improvement strategy.



[email protected] Lee Byung-cheol, correspondent Reporter