Photo: Restaurant Clicks
Burger chain Wendy’s saw a 15% surge in its stocks after Trian, its largest stakeholder, announce possible future deal with the company.
Trian Partners filed a hedge fund saying it aims to “enhance shareholder value.” The multibillion-dollar investment management firm hold about 19.4% of Wendy’s company share.
According to the firm in a statement, they were able to gather advisors to discuss strategies and options together with Wendy’s higher-ups.
After the announcement, Wendy’s management said it’s open for any proposal since their goal as a company is to “maximize value for all stockholders.” Wendy’s further said that their board will look at proposals from Trian carefully.
Trian Partners is run by Nelson Peltz, who is also its founder. The firm invested in Wendy’s back in 2005. “At that time, Wendy’s was one of America’s most beloved brands, but the business had lost its way after the passing of its founder Dave Thomas,” said the firm recalling how they decided to assume some stocks from the chain.
To date, Train owns three board seats, one being held by its CEO.
Wendy’s have a total of over 7,000 restaurants. During the first quarter of this year, the company’s sales increased 2.4%. It has declared a quarterly net income of $37.4 million (about 16 cents per share). The figures are 10% less than $41.4 million it declared in the same period last year.
Trian continues to help the fast-food chain develop its brand. According to Titan, Wendy’s should continue to improve its operations and solidify its brand among consumers.
Over the years, the company has tried to experiment on their menu to provide variety to its customers, including launching their own breakfast menu in March of 2020. However, the plan of the company to overtake fast-food giants like McDonald’s and Burger King was put at a standstill after the COVID-19 lockdowns.
Like many companies in the United States, Wendy’s faced problems and sales plummeted after the lockdown restrictions were imposed by the US government.
Despite the problem, Wendy’s continued to serve their customers. Now that the market has reopened, the possibilities are now opening for the company as well – one such is the recent announcement by their shareholder, Trian Partners.
Amid inflation rates, Wendy’s market stocks were downgraded by the BMO Capital Markets, lowering the firm’s price target from $28 to $22. Following the announcement by BMO, Wendy’s saw a 2.5% dip in its stocks.
However, the management is hopeful that the losses will be addressed with the new development with Trian. Wendy’s will yet announce how the fund would help their company.
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