Activist hedge fund Blackwells Capital is preparing to challenge Wendy’s board of directors in an effort to improve the fast-food chain’s financial performance, people familiar with the matter said Friday.
Blackwells, led by Jason Aintabi, plans to nominate several directors to Wendy’s 12-member board, said the sources, who asked not to be identified discussing confidential deliberations.
The challenge pits Blackwells against another activist hedge fund, Trian Fund Management, which owns a 16% stake in Wendy’s and has three representatives (Trian CEO Nelson Peltz, Trian Chairman Peter May and son de Peltz, Matthew, co-director of research at Trian), who are part of the group. Board of directors of a company based in Dublin, Ohio.
Blackwells took on Trian this week in another company: Walt Disney. Blackwells issued a statement Thursday criticizing Trian for its board challenge attempt against the entertainment giant and supported Disney CEO Bob Iger.
In the same statement, Blackwells said of Wendy’s that Peltz had installed his son, Matthew H. Peltz, as non-executive vice chairman and “packed the board of directors with business partners and friends, while presiding over a period of disappointing results for Wendy’s shareholders.” “. “He did not mention any plans to challenge the Wendy’s board of directors.
Blackwells declined to comment further Friday. Wendy’s and Trian did not respond to requests for comment.
The size of Blackwells’ stake in Wendy’s was not available.
Wendy’s shares closed up 4.2% on Friday at $19.54, giving it a market value of about $4 billion.
Wendy’s had seen its share price fall 15% this year before news of Blackwells’ plans, amid investor concerns about slowing growth in its same-restaurant sales. By comparison, the stock price of competitor McDonald’s is up 7.3%, Shake Shack’s is up 46% and Restaurant Brands International, owner of Burger King and other fast-food chains, is up 11% this year. .
Blackwells made headlines last year when Aintabi pressured exercise bike maker Peloton Interactive to fire its CEO, John Foley, and explore a sale.
Peloton replaced Foley but was not sold.
Trian explored the possibility of taking Wendy’s private last year, but announced in January that it would no longer pursue this option.
Wendy’s reported third-quarter adjusted earnings per share of 27 cents last month, beating analysts’ average estimate of 25 cents.
However, it posted comparable sales growth of 2.8% globally and 2.2% in the United States, lower than a year ago.
In the third quarter of 2022, Wendy’s reported global restaurant comparable sales growth of 6.9% and U.S. comparable sales growth of 6.4%.
