By Basant El-Faramawy
Wendy's rejected a $1.4 billion buyout offer from activist investor Nelson Peltz, saying the bid substantially undervalues the company. The board's committee of independent directors unanimously turned down the proposal.
The company also adopted a shareholder rights plan, known as a "poison pill," which automatically triggers if any person or group acquires 15% or more of Wendy's shares. Peltz's Trian Fund Management and its partners currently hold 16.3% of the company's stock.
Shares of the burger chain surged 14% after the offer became public last Wednesday and rose more than 2% Thursday as Wendy's reported better-than-expected third-quarter results. The poison pill plan will remain in effect for one year.
Wendy's has been contending with inflation and a pullback from lower-income customers as it raised prices to offset higher labor, food, and packaging costs.
