December 14, 2005
Do What Works Right
Billionaire Nelson Peltz (of Snapple and Arby’s fame), has decided he doesn’t like the way Wendy’s is run and he wants to change it. Through his new private investment fund Trian, Peltz has acquired about 5.5 percent of Wendy’s. According to this New York Times article, Trian styles itself as an “operational activist,” one which becomes very involved with operational details of its investments. Trian has written a detailed white paper picking apart Wendy’s operations and has made a list of ways to revive the lagging business, including slashing about $200 million from corporate overhead.
In response to similar criticisms, Wendy’s announced plans in July to spin off 15 to 18 percent of Tim Hortons, its Canadian coffee and baked goods chain, in an initial public offering. Trian estimates that Wendy’s shares could be worth $77 to $89 each if its suggestions were followed; Wendy’s shares closed Tuesday at $51.37. Not stopping at its proposal on the Wendy’s operations, Trian is also expected to seek a complete spin off of Tim Hortons and the sale of Wendy’s Baja Fresh, Café Express and Pasta Pomodoro chains.