Wendy’s receives buyout offer from activist investor Nelson Peltz

Struggling burger chain Wendy’s has received a buyout offer from Nelson Peltz’s hedge fund Trian Fund Management.

The buyout offer comes after Wendy’s shares dropped roughly 70% over the past five years, per the Wall Street Journal.

Trian argues that the chain would be better off as a private company and offered to pay around $1.4 billion.

The chain, founded in 1969 by Dave Thomas and named after his daughter, is known for its square burgers and Frosty desserts. Same-store sales, or sales at restaurants open at least a year, have declined for 10 straight quarters.

Peltz’s Trian Fund Management and several partners are offering Wendy’s $7.35 per share in cash, or a premium of nearly 19% over the stock’s closing price on Tuesday.

In a letter to the company’s board of directors, Peltz said going private “will deliver the best outcome for the broader stakeholder base.”

“Wendy’s sits at a critical juncture,” Peltz wrote. “The external environment has become increasingly challenging given the significant pressures on the U.S. consumer, economic uncertainty, persistent commodity inflation and intensifying competition, particularly within the QSR (quick service restaurant) burger category.”

Peltz has invested in companies from Procter & Gamble and Disney, to DuPont. According to a regulatory document filed Wednesday, Trian’s stake in Wendy’s totals 16.3%.

Wendy’s, based in Dublin, Ohio, declined to comment. The chain is scheduled to report its quarterly financial results next week. Analysts expect Wendy’s earned 9 cents per share on sales of $531 million on average.