Wendy’s has rejected a $1.4 billion buyout offer from activist investor Nelson Peltz and adopted a “poison pill” plan to fend off a hostile takeover, the company announced Thursday (November 5). The board said the proposal “substantially undervalues” Wendy’s and does not reflect its future earnings potential.

The offer, made through Peltz’s Trian Fund Management, would have taken Wendy’s private at $7.35 per share. Trian, which already holds about 16% of Wendy’s shares, is the company’s largest shareholder. The board’s independent committee unanimously rejected the offer, stating that Wendy’s has a turnaround strategy it believes will drive long-term value for shareholders. Board chairman Art Winkleblack said, “The Independent Committee thoroughly evaluated this proposal and unanimously concluded that it substantially undervalues Wendy’s standalone prospects and long-term earnings potential.”

Wendy’s CEO Bob Wright, who joined in May, said the company’s strategy is already producing positive results. “We’re confident that we have the right strategy, execution and resources to restore Wendy’s to its full potential and drive meaningful shareholder value,” Wright told investors.

The newly adopted shareholders’ rights plan—commonly called a “poison pill”—will allow all shareholders except the hostile bidder to buy discounted shares if any individual or group acquires 15% or more of Wendy’s stock. This plan, which lasts for one year, is designed to ensure all shareholders receive fair treatment in any potential takeover and to discourage any group from gaining control without paying a premium.

Wendy’s has faced challenges in recent years, including high beef prices, aging stores, and increased competition. The company has been closing underperforming U.S. locations—240 restaurants in 2024 and up to 358 more planned for 2026—and one of its largest franchisees filed for bankruptcy protection in September.

Shares of Wendy’s rose more than two percent Thursday (November 5) after the company reported better-than-expected third-quarter results. The poison pill plan will remain in effect for one year as the board continues to pursue its turnaround efforts.

Armstrong & Getty