A struggling fast food chain is suddenly moving fast on Wall Street. MAGA billionaire Nelson Peltz is plotting a dramatic takeover of the ailing burger giant Wendy's.
Peltz - father to socialite Nicola Peltz and father-in-law of Brooklyn Beckham - said his firm, Trian Fund Management, has been in talks with banks and backers about a deal that could see it take a controlling stake in Wendy's. People familiar with the matter confirmed the latest update on Peltz's potential bid to the Financial Times on Tuesday.
The move sent Wendy's shares soaring by 17 percent to $7.90 on Tuesday, valuing the company at roughly $1.3 billion as investors bet on a potential buyout battle.
This isn't the first time Peltz has advocated for the burger joint. In February, he deemed the chain undervalued, saying it's worth far more than its stock price at the time suggested. That declaration also sent shares soaring nearly 19 percent.
The fast food chain's stock has been falling for four consecutive years, dropping almost 19 percent this year alone. The Dublin, Ohio-based chain has endured a bruising stretch. US same-restaurant sales fell 11.3 percent in the quarter ended December 28, compared with growth of 4.1 percent a year earlier.
Meanwhile, rivals like Yum Brands, owner of Taco Bell, and McDonald's have managed to boost sales thanks to value meals and menu innovations. One big reason Peltz believes Wendy's is undervalued comes down to how cheaply the stock is priced compared to its rivals.
Investors currently value Wendy's at about 11 times its expected earnings over the next year. By comparison, McDonald's trades at more than 24 times earnings, and Yum Brands trades at nearly 24 times as well. That measure, known as the price-to-earnings ratio (P/E ratio), shows how much investors are willing to pay for every $1 a company earns. In simple terms, investors are paying more than twice as much for every dollar of profit from McDonald's or Yum than they are for Wendy's.
To Peltz, that gap suggests Wendy's stock could have significant room to rise if the company turns its performance around and wins back confidence. This isn't Peltz's first flirtation with the burger giant. Back in 2022, he eyed a possible takeover bid for Wendy's.
Meanwhile, Wendy's announced in November that it would close 300 restaurants across the US in an effort to cut costs and win back customers who say its meals have become too expensive. That would mean a cut of about 5 percent of its nearly 6,000 locations. Wendy's had also shuttered 140 locations in 2024, joining many competitors in facing the harsh reality that Americans are cutting back on takeout as prices soar and paychecks shrink.
Peltz's bet on Wendy's comes as his son-in-law is embroiled in family drama, with the oldest Beckham son opting to spend most of his time in California with Nicola.
