Wendy Board Clash: In a notable development, activist hedge fund Blackwells Capital is gearing up to challenge the board of directors at Wendy’s Co (WEN.O), aiming for enhancements to the fast-food chain’s financial performance, according to sources familiar with the matter.
Blackwells, led by Jason Aintabi, is set to nominate multiple directors to Wendy’s 12-member board, as disclosed by the anonymous sources. This move positions Blackwells in opposition to another activist hedge fund, Trian Fund Management, which holds a 16% stake in Wendy’s. Trian currently has three representatives, including CEO Nelson Peltz, on Wendy’s board. The recent friction between Blackwells and Trian extends beyond Wendy’s to encompass a clash over Walt Disney Co (DIS.N). Blackwells publicly criticized Trian for its attempted board challenge against Disney, expressing support for Disney CEO Bob Iger.
Notably, Blackwells accused Peltz of appointing his son Matthew as non-executive vice chairman at Wendy’s and filling the board with associates, all while overseeing disappointing results for Wendy’s shareholders. Although not initially indicating plans to challenge Wendy’s board, Blackwells now appears poised for such action. Blackwells, when approached for comment, opted not to provide additional details on Friday.
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Wendy’s lead independent director, Nelson Peltz, along with Arthur Winkleblack, responded to the situation, stating, “We welcome dialogue with all Wendy’s shareholders.” They emphasized the board’s openness to engaging with shareholders and acknowledged the value of diverse perspectives. Notably, the size of Blackwells’ stake in Wendy’s remains undisclosed.
Wendy’s stock experienced a 4.2% increase on Friday, closing at $19.54, resulting in a market value of approximately $4 billion. However, prior to Blackwells’ intentions being publicized, Wendy’s had faced a 15% decline in its stock price this year, raising concerns among investors regarding slowing growth in same-restaurant sales. In comparison, competitors like McDonald’s Corp (MCD.N), Shake Shack Inc (SHAK.N), and Restaurant Brands International Inc (QSR.TO) witnessed varying degrees of stock price growth during the same period.
Blackwells gained attention last year for pressuring Peloton Interactive Inc (PTON.O) to oust its CEO and explore a sale. Despite a leadership change, Peloton has not pursued a sale. Trian, a major activist investor established in 2005, contemplated taking Wendy’s private last year but abandoned the idea in January. Wendy’s reported third-quarter earnings exceeding analysts’ estimates but revealed lower same-restaurant sales growth compared to the previous year. Trian’s past investments include Procter & Gamble (PG.N), Unilever Plc (ULVR.L), and Janus Henderson Group Plc (JHG.N).