Wendy's rejects $1.4B buyout bid, adopts poison pill to block takeover

Wendy's, the Dublin, Ohio-based burger chain, has rejected a $1.4 billion buyout offer from activist investor Nelson Peltz, according to Macomb Daily. The company stated the bid was too low and did not reflect its long-term earnings potential under the new CEO.

The board of Wendy's also adopted a shareholder rights plan, commonly called a 'poison pill,' designed to make a hostile takeover more difficult. This plan allows shareholders, except a hostile bidder, to buy discounted shares, diluting any entity that acquires 15% or more of Wendy's shares.

Peltz's investment group, including Trian Fund Management, currently holds 16.3% of Wendy's shares. The poison pill plan would be triggered if a hostile bidder crosses this ownership threshold.

Wendy's CEO Bob Wright, who joined the company in May and has previously held leadership roles at Wendy's and other restaurant chains, said the company has a turnaround plan already showing positive results. He expressed confidence in the company's strategy to restore Wendy's potential and increase shareholder value.

Following the announcement, Wendy's shares rose less than 1% amid a better-than-expected third-quarter performance. A committee of independent directors unanimously rejected the buyout offer, stating it substantially undervalues the company.