How Nelson Peltz Is Pulling Off Another Solid Win for Wendy’s
Wendy's shares saw a handy gain on Thursday after the company announced that it accepted an offer to sell its ownership interest in Inspire Brands back to that company. This is a solid win for Nelson Peltz and Wendy’s in…
Wendy’s Co. (NASDAQ: WEN) shares saw a handy gain on Thursday after the company announced that it accepted an offer to sell its 12.3% ownership interest in Inspire Brands back to that company for $450 million. This is a solid win for Nelson Peltz and Wendy’s in general.
Note that the agreement was approved by the Wendy’s board of directors and represents a 38% premium on Wendy’s previous valuation of the investment. Inspire Brands owns Arby’s, Buffalo Wild Wings and R Taco.
Wendy’s intends to use the proceeds from this transaction to invest in brand growth and increase the company’s share repurchase program.
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The board of directors has authorized a new share repurchase program for up to $100 million of the common stock through December 27, 2019. This is in addition to the current $175 million share repurchase authorization, expiring March 3, 2019, which had $93.1 million remaining as of August 1, 2018.
Nelson Peltz, Wendy’s board chair, commented:
The sale of our stake in Inspire Brands for $450 million is a great return on this investment for our shareholders. Over the past seven years, Wendy’s and its shareholders have benefitted from more than $100 million in distributions and the monetization of this investment carries a 38 percent premium over its most recent valuation.
Shares of Wendy’s were last seen up about 3.6% at $18.53, with a consensus analyst price target of $19.47 and a 52-week range of $13.57 to $18.55.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
