Wendy's to Buy Back $1.4 Billion of Shares; Trian to Cut Stake

Jun 3 2015 | 12:10pm ET

(Reuters) - Hamburger chain Wendy's Co. will buy back $1.4 billion of shares, including $211 million from Nelson Peltz's Trian Group, its largest shareholder, in its biggest repurchase program.

Trian said the sale of shares is part of its plan to reduce stake in Wendy's to 17.0-19.7 percent in the "next few months" from 24.8 percent to "avoid adverse federal income tax consequences."

Wendy's shares rose as much as 5.5 percent to an over seven-year high of $11.71 on Wednesday.

The company launched an $850 million share buyback program. It aims to complete the total buyback program by the end of 2016.

Trian plans to reduce its holding in Wendy's by at least 20 percent by selling shares in the buyback program as well as in the open market or through privately negotiated deals, the hedge fund said in a regulatory filing. 

Wendy's had 363.5 million shares outstanding as of May 29. On this basis, Trian holds about 90 million shares in the restaurant chain.

Peltz, a non-executive chairman on Wendy's board, has held a stake in the company since 2005.

Wendy's also adjusted its full-year earnings forecast to reflect the sale of its bakery operations.

The company said it expected 2015 adjusted earnings of 31-33 cents per share, excluding about 2 cents per share attributable to its bakery operations.

Wendy's received after-tax proceeds of about $50 million from the sale of its bakery operations, which was announced in May.

The company's shares were up 4.5% at $11.60 in late morning trading on the Nasdaq.


In Depth

Q&A: Portfolio Advisors' Brian Murphy On The Advantages of A Private Markets Platform

Jan 2 2018 | 11:05am ET

Most private markets firms reference their platforms as a source of competitive...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: The Top Hedge Fund Industry Trends for 2018

Jan 2 2018 | 12:22pm ET

Each year, Don Steinbrugge’s Agecroft Partners compiles the insights gained...

 

FINalternatives Trending

From the current issue of