Wendy's rejects buyout bid and girds itself for a hostile takeover campaign

DUBLIN, Ohio — Wendy's rejected a $1.4 billion buyout offer from an activist investor, saying Thursday that the bid was too low and didn't take into account the company's long-term earnings potential under its new CEO.

The Dublin, Ohio-based burger chain also said Thursday that its board had adopted a "poison pill" plan designed to make it more difficult to engineer a hostile takeover of the company.

Noted investor Nelson Peltz made an offer last week to buy the chain, which has been struggling with high beef prices and aging stores. Peltz said the fast-food landscape had become increasingly challenging, with consumers under pressure, intensifying competition and persistent inflation, and his offer was the best path forward for shareholders.

But in a conference call with investors Thursday, Wendy's CEO Bob Wright, who joined the company in May, said Wendy's has a turnaround plan in place that is already producing good results. Wright, who is the fourth CEO to lead Wendy's since 2024, was previously the president and CEO of Potbelly. He has also held senior leadership roles at Wendy's, Checkers and Domino's Pizza.

"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 said.

Shares rose less than 1% Thursday as the company reported a better than expected performance in the third quarter.

Wendy's said in a statement that a committee of independent directors unanimously rejected the offer because it "substantially undervalues" the company.

Wendy's shareholder rights plan — commonly known as a "poison pill" plan — grants all shareholders except a hostile bidder the right to purchase discounted shares and dilute the hostile bidder's ownership stake. It is automatically triggered if a person or group owns 15% or more of Wendy's shares.

Peltz's Trian Fund Management and other partners in the investor group that made the offer to Wendy's hold 16.3% of the company's shares. The plan would stay in place for one year, Wendy's said.

Trian didn't immediately respond to a request for comment Thursday. Peltz served as chairman of Wendy's board for 17 years until 2024. His son Bradley Peltz still serves on the company's board and is a Wendy's franchisee.

Dine Brands, the parent company of Applebee's and IHOP, adopted a similar one-year poison pill plan last week to fend off a takeover bid by two investment firms.

Founded in 1969 by Dave Thomas and named after his daughter, Wendy's is known for its square burgers and Frosty desserts. The fast-growing chain introduced the drive-thru window in 1970 and went public in 1976. In the 1980s, as it jockeyed for sales with McDonald's and Burger King, Wendy's launched salad bars and ran its iconic "Where's the beef?" ad campaign.

But as the fast-food market grew even more competitive and rival burger-focused chains like In-N-Out and Five Guys expanded, Wendy's fell behind. Wendy's share of U.S. burger chain sales fell from 11.5% in 2019 to 10.4% last year, according to Technomic, a market research company.

The industry has also been seeing lower U.S. traffic, especially from lower-income customers, as high gas prices and affordability concerns eat into household budgets. Third-quarter foot traffic fell 2.6% across the entire fast food sector in the U.S., according to Revenue Management Solutions, a restaurant industry consultant.

Wendy's has been closing outdated U.S. restaurants so it can focus on its more profitable locations. The company closed 240 restaurants in 2024 and said earlier this year that it planned to shutter up to 358 locations in 2026.

Then, in September, one of the largest U.S. franchisees for Wendy's filed for bankruptcy protection after the chain tried to terminate its franchise agreement. Michigan-based Meritage Hospitality Group operates 314 Wendy's restaurants in 15 states.

Under Wright, Wendy's has launched a turnaround plan dubbed "Dave's Way," which calls for improving food quality, more distinctive marketing and improved digital ordering and restaurant operations.

Wright said Thursday that Wendy's has begun testing quality improvements, including thicker and crispier bacon, creamier Frosties and whole-leaf lettuce on sandwiches. The company is removing lower-volume items from its menus to reduce complexity in its kitchens and making breakfast optional, allowing franchisees to focus on their most profitable times of day.

Wendy's on Thursday reported revenue of $547 million in the July-September period. That was better than the $531 million Wall Street had forecast, according to analysts polled by FactSet. Wendy's same-store sales, or sales at locations open at least a year, fell 5.2%, which was also better than the 6.4% drop analysts forecast.

Wendy's had 5,969 restaurants in the U.S. and 1,428 outlets in 38 countries at the end of 2025.