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Wendy's sale on the table amid rising costs

Wendy's sale on the table amid rising costs
Wendy's burger chain could be for sale after federal regulatory filing by largest shareholder Trian Partners. File Photo by Rob Wilson/Shutterstock

May 25 (UPI) -- Wendy's could be for sale, as the burger chain's biggest shareholder announced plans to "explore and evaluate" a transaction to boost the company's sagging stock prices.

In a federal regulatory filing Tuesday, billionaire investor Nelson Peltz, who has been a director at Wendy's since 2008, disclosed he owns 19.4% of the company's stock through his private equity fund, Trian.

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"Such a potential transaction could include an acquisition, business combination such as a merger or other transaction that would result in the acquisition of control of the company by the filing persons," the filing said.

Wendy's has seen its profit margins drop in the highly competitive fast-food market amid rising commodity and labor costs, despite adding breakfast at the start of the COVID-19 pandemic. Wendy's shares have lost nearly a third of their value this year.

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The fast-food chain's stock jumped 11% Wednesday morning over news of the U.S. Securities and Exchange Commission filing. While investors may be eager for a sale, the SEC filing said there could be no deal as analysts warned of too much competition in the market.

"We believe a sale of Wendy's may not be straightforward," Cowan restaurant analyst Andrew Charles said in a note Tuesday. He added that many of the large restaurant owners already have a burger chain in their portfolio.

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Wendy's responded to the SEC filing Tuesday and said it would consider Trian's offer.

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"The Wendy's Company's Board of Directors and management team regularly review the Company's strategic priorities and opportunities with the goal of maximizing the value for all stockholders," the company said in a statement. "Our board is committed to continuing to act in the best interests of the Company and its stockholders. Consistent with its fiduciary duties, the Board will carefully review any proposal submitted by Trian Partners."

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