Wendy's on Thursday rejected a $1.4 billion takeover offer from a group of investors led by Nelson Peltz's Trian Fund Management, according to the company.
The group offered $7.35 per share in cash on Oct. 28 to take the burger chain private. Besides Trian, the group includes investment firms BlueFive Capital and Sixth Street Partners, plus Flynn Group, one of Wendy's largest franchisees.
Wendy's said an independent committee of its board found the proposal "substantially undervalues" the company. The committee said the offer does not reflect potential gains from the chain's ongoing turnaround strategy, according to a press release. Board chair Art Winkleblack said in a statement that the board's confidence rests in CEO Bob Wright's track record in restaurant turnarounds.
To guard against a hostile takeover, Wendy's adopted a shareholder rights plan, known as a poison pill, with a one-year duration, effective Wednesday. The company said the Trian-led group rejected a Wendy's offer for a standstill agreement that would have paused additional share purchases. Trian declined to comment on Wendy's decision.
Wendy's also reported third-quarter results Thursday. Same-store sales declined for the seventh straight quarter. Quarterly earnings and revenue beat Wall Street expectations. Shares fell less than 1% in morning trading. The company's stock has lost about 60% of its value over the last three years.