Nelson Peltz wants Wendy's. Again.
His Trian Fund offered $7.35 a share in cash. That's a 20% premium. Shares jumped 15%. Retail traders cheered like they'd been invited to the wedding.
They weren't. They're the caterers.
Consider the track record. Peltz sold Wendy's to Arby's in 2008, a $2.3 billion deal. Now he wants it back for $1.4 billion. That's a 39% discount on a burger chain, and he's the one who handled it last time. Most people at least change the locks.
Trian already owns about 16% of the company. Peltz's son Bradley sits on the board. Trian's Peter May sits on the board. The call is coming from inside the drive-thru.
Then there's the stock. It's down 65% over two years, even after Wednesday's pop. Six straight quarters of falling same-store sales. A revolving door of CEOs, each with a fresh turnaround plan and the lifespan of a limited-time offer.
Franchisee Meritage Hospitality filed for bankruptcy in September. Flynn Group, another giant franchisee, is now part of the buyout group. Imagine owning the restaurants, then joining the people buying the company that sells you the burgers. That's not a deal. That's a hostage situation with a rewards app.
The retail trader's thesis is simple. Billionaire wants it, so billionaire knows something. Billionaire knows he's already 16% in. Billionaire needs the other 84% to stop asking questions.
Wendy's reports earnings November 5. Six straight misses on sales suggest the Frosty will arrive melted.
If you bought Wendy's today at a 15% premium, congratulations. You just paid Nelson Peltz's asking price to hold his old bag.
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