Wendy's stock rose almost 16.5% this week after reports said Nelson Peltz's Trian Fund Management is preparing a bid to take the company private. The move followed a report that linked the investor to a possible takeover and sent the shares up nearly 17% in a day.
Brooke DiPalma on Wendy's
“Wendy's (WEN) stock is surging on reports of a pending takeover bid to take the company private,” Brooke DiPalma said on Yahoo Finance. She added, “This comes after Wendy's has reported six straight quarters of declines in their most recent quarter out just last week.”
That latest quarter included down 6.3% same-store sales growth, a figure that gives the takeover report immediate weight for shareholders trying to read the stock move. A bid to take a company private usually starts by forcing investors to compare the current market price with what an acquirer might be willing to pay.
Bob Wright in November
Wendy's now has Bob Wright at the helm, and DiPalma said, “We have Bob Wright now at the helm, who oversaw Potbelly, which, keep in mind, is now a privately held company.” She also said, “He is going to introduce to investors a turnaround plan in the third quarter call in November.”
That leaves two tracks running at once: a potential buyout discussion and an operating reset inside Wendy's. Over the past five years, Burger King has been taking the lead in market share, and Restaurant Brands International and Burger King were mentioned in comparison with Wendy's performance over that span.
DiPalma also said, “Maybe Nelson just maybe Nelson just loves the chocolate Frosty.” The more immediate issue for investors is whether Trian Fund Management turns the report into a formal bid; until then, the stock is trading on expectation, not a deal.
