Wendy’s rejects $1.4 billion buyout bid from activist investor and adopts ‘poison pill’ plan
US burger chain Wendy’s has rejected a $1.4 billion buyout offer from activist investor Nelson Peltz, saying on Thursday that the bid was too low. At the same time, it has adopted a plan known as a “poison pill”, intended to make a hostile takeover of the company more difficult.
The company said a committee of independent directors unanimously rejected the offer on Wednesday because it “substantially undervalues” the company.
Wendy’s said it has adopted a shareholder rights plan, a so-called “poison pill”, intended to avert a hostile takeover. Under the plan, all shareholders except the hostile bidder gain the right to purchase shares at a discount. The plan automatically triggers if a person or group owns 15% or more of Wendy’s shares.
The investor group that made the offer includes Peltz’s Trian Fund Management and other partners. That group holds 16.3% of the company’s shares. Wendy’s said the poison pill plan would stay in place for one year.
Shares of the struggling burger chain spiked 14% last Wednesday after noted investor Nelson Peltz made the offer to buy it. Shares rose more than 2% on Thursday as the company reported a better-than-expected performance during the third quarter.
Wendy’s has wrestled with inflation like other fast food chains, and lower-income customers have cut down on visits as the company raised prices to combat rising labour, food and packaging costs.
