Activist investor Blackwells Capital is reportedly making a run at the Wendy’s Board of Directors, according to Reuters.
A source told the publication that the firm plans to nominate multiple directors to the burger chain’s 12-member board to implement improvements and help the company’s financial performance. Wendy’s U.S. same-store sales rose 2.2 percent in Q3 and 4.9 percent in Q2. Wendy’s global digital mix reached 13 percent in Q3, up 30 percent year-over-year. The brand is on pace for $1.8 billion in digital sales this year, which would be up more than 20 percent versus 2022.
The brand is currently controlled by another activist investor, Trian Fund Management, which controls 16 percent of Wendy’s. Trian has three members on the board of directors CEO Nelson Peltz, president Peter May, and co-head Matthew Peltz.
Blackwells recently displayed its disapproval of Trian’s leadership by criticizing Trian’s attempt to seek seats on the Disney Board of Directors. In the statement, Blackwells said it was concerned that “Trian’s campaign prioritizes Mr. [Nelson] Peltz’s ego over what is best for all Disney shareholders.”
In the same press release, the firm also noted its displeasure with Trian’s work at Wendy’s. Blackwells said Nelson Peltz’s involvement at the fast-food giant should be a “cautionary tale” for Disney shareholders.
“In an act of nepotism, Mr. Peltz installed his son, Matthew H. Peltz, as the non-executive Vice Chairman and packed the board with business partners and friends, while presiding over a period of disappointing results for Wendy’s shareholders,” Blackwells said in a statement.
In response, Nelson Peltz, and Arthur Winkleback, Wendy’s lead independent director, said the board would “welcome dialogue with all Wendy’s shareholders.”
“Our board and management does not have a monopoly on good ideas. In the spirit of good corporate governance, we are more than happy to engage with any shareholder to discuss their views and, as always, we are open to adding any new board member who can add value,” Nelson Peltz and Winkleback said in a statement.
In May 2022, Trian informed Wendy’s board of its intention to assess a potential transaction, either independently or in collaboration with external parties. However, in January, Nelson Peltz informed the board of his decision to not pursue this particular move. Instead, he recommended that, given Wendy’s strong sales performance and financial stability, the most effective approach to enhance shareholder value would involve buying back company stock and increasing cash dividends. In response to this suggestion, Wendy’s announced plans to raise its quarterly dividend to $0.25 per share and initiate a $500 million share repurchase program.
