Restaurant chain Wendy’s (WEN) has rejected a $1.4 billion U.S. takeover offer from a group of investors led by activist hedge fund Trian Fund Management.
The investor group had offered $7.35 U.S. per share in cash for Wendy’s on Oct. 28 of this year and planned to take the struggling hamburger chain private.
The takeover offer comes after Wendy’s earlier this year formed a committee to assess any potential bids to take the company private.
However, Wendy’s board of directors has rejected the $1.4 billion U.S. proposal from the investors led by Trian, saying it “substantially undervalues” the company.
News of the rejection comes as Wendy’s reports its third-quarter financial results. Same store sales across the chain declined for a seventh consecutive quarter.
Wendy’s has struggled in recent years in a highly competitive fast-food market. Promotions and discounts at its restaurants have failed to attract consumers.
The restaurant sector is also struggling as price-conscious consumers dine out less often as they grapple with inflation and higher prices for gasoline and food from grocery stores.
Trian Fund Management already owns 16.3% of Wendy's, making the hedge fund the company's largest shareholder.
WEN stock has declined 66% over the past five years to trade at $7.65 U.S. per share.
