Wendy's board rejected a $1.4 billion take-private offer from a group led by activist investor Nelson Peltz's Trian Fund Management on Thursday, and simultaneously adopted a shareholder rights plan designed to block the group from accumulating a larger stake in the burger chain.

An independent committee of Wendy's board unanimously turned down the $7.35-per-share all-cash proposal from Trian, alongside partners Flynn Group, BlueFive Capital and Sixth Street Partners, according to CNBC. Trian's group had submitted the bid on Oct. 28, offering roughly a 20% premium over Wendy's closing share price the day before, and valuing the full deal at approximately $1.4 billion.

Board says the price undersells the turnaround

The committee concluded the offer substantially undervalued Wendy's and failed to account for the company's long-term earnings potential, including gains expected from its ongoing turnaround strategy, per Bloomberg. Trian and its affiliated parties currently hold a 16.3% stake in Wendy's, according to regulatory filings reviewed by Reuters.

SUBSTANTIALLY UNDERVALUES THE COMPANY

In response to the bid, Wendy's adopted a one-year shareholder rights plan, commonly known as a poison pill, that would automatically trigger if any single investor or coordinated group acquires 15% or more of the company's shares, a threshold designed to prevent Trian's existing stake from growing into a controlling position without paying a premium acceptable to the full board.

Trian declined to comment on the rejection. The fund's relationship with Wendy's stretches back more than a decade; Peltz and Trian explored and ultimately abandoned a prior takeover attempt in 2023, at which point Trian held more than 19% of Wendy's shares. This latest bid marks Trian's most direct attempt yet to take the Dublin, Ohio-based chain private.

Wendy's stock has struggled in recent years against faster-growing rivals, and the company has spent the past several quarters pursuing a turnaround built around reimaged restaurants, digital ordering investments and new value-menu offerings. The board's decision signals confidence that those initiatives, not a sale, represent the better path to boosting shareholder value, a bet investors and Trian will now be watching closely in the weeks ahead for any sign the activist fund pushes back with a sweetened offer or a proxy fight.