Nelson Peltz's Trian submitted a bid of about $1.4 billion to take Wendy's private

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The non-binding $7.35-a-share cash proposal is about a 20% premium to Tuesday's close, and a special committee is expected to review it

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Nelson Peltz's Trian Fund Management submitted a non-binding proposal on Wednesday to take Wendy's $WEN private for $7.35 a share in cash, a premium of about 20% to Tuesday's closing price.

The deal is valued at about $1.4 billion, according to The Wall Street Journal. Trian and affiliated parties own about 16.3% of Wendy's stock and made the offer together with Flynn Group, BlueFive Capital and Sixth Street Partners, the letter said. The proposal covers all stock the group does not own. Wendy's stock finished Tuesday's session at $6.14, leaving it down roughly 26% since January. Wendy's did not immediately respond to requests for comment, according to Bloomberg.

Trian said the group and others would fund the cash consideration and deliver signed equity commitment letters when definitive agreements are signed. Trian intends to roll over its Wendy's stock. The letter said the proposal requires no new debt and has no financing condition, and that Wendy's existing securitization financing would remain in place after closing.

The transaction would be structured as a Delaware merger needing approval from a majority of outstanding stock, and Trian would vote its stock in favor, the letter said. Trian expects a special committee of independent directors on Wendy's board to review the proposal and make a recommendation. The group said it is prepared to complete confirmatory due diligence and expects to negotiate definitive agreements over the coming weeks.

J.P. Morgan is lead financial advisor, BofA Securities is co-lead financial advisor and Debevoise & Plimpton is legal advisor to the group. Peltz, Trian's CEO and founding partner, and Greg Flynn, chairman and CEO of Flynn Group, signed the letter. Flynn Group operates more than 340 Wendy's restaurants in the U.S.

The letter said Wendy's faces pressure on U.S. consumers, commodity inflation and competition in the burger category. It said the company needs significant capital investment and faces approaching debt maturities. Trian argued that private ownership would give the company long-term capital to carry out a turnaround.

The letter described itself as an expression of interest only. Trian reserved the right to withdraw or change the terms at any time, and no legal obligation arises until the parties sign definitive agreements.

Trian had been putting together a group of investors to take Wendy's private as of August. Around that time, Wendy's cut its quarterly dividend in half and withdrew its full-year outlook after U.S. comparable restaurant sales fell 7.0% in the second quarter. Trian examined a takeover of the chain in 2022 but did not pursue it.

Bob Wright became Wendy's permanent president and CEO in May. Trian executive Peter May and Bradley Peltz, Nelson Peltz's son, sit on the Wendy's board.

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