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Wendy’s (WEN) Stock Surges on Potential Trian Buyout, What’s Next?

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Updated 25 May 2022

Key points:

  • Wendy's is exploring a potential deal with its largest shareholder, Trian Partners
  • WEN stock surged as much as 15% in Tuesday after-hours trading
  • Train have been actively pushing Wendy's for change, including building the company brand

One of the US’s most famed fast-food chains is apparently exploring buyout options, according to a filing released in after hours trading on Tuesday. Wendy’s (NASDAQ: WEN) is supposedly exploring a potential deal with its largest shareholder, Trian Partners. Shares rose as much as 15% in extended trading, before settling to a current premarket gain of 8% moving towards Wednesday’s market open. 

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Trian have long been active in pushing the fast-food chain, previously pressuring the company to reduce restaurant overheads, develop operations and to build up the overall brand. The hedge fund owns a total 19.4% stake in the chain, providing leverage for growth momentum should a deal be on the cards. 

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Trian hopes to establish a deal that will “enhance shareholder value”, including the obvious possibility of an acquisition or merger. Wendy’s noted that management regularly reviews similar opportunities with future growth and stockholder value in mind, and it would carefully review any proposal from Trian.

Wendy’s has a long-established relationship with Trian, stretching back to 2005 with the birth of the fund itself. The investment hoped to realign the disheveled Wendy’s brand after its founder passed, adding much needed vigor and direction. Now, Wendy’s and its owned franchises own around 7,000 restaurants.

Trends are changing, and it takes forward-thinking initiative to be able to stay comfortably ahead of the sharp inflation curve that’s working its way through consumer’s pockets. Remaining competitive against rival giants like McDonalds also poses a further set of constant challenges.