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Trian changes Wendy's order

Illustration of a double cheeseburger being eaten in reverse.

Illustration: Brendan Lynch/Axios

Trian Fund Management, the activist hedge fund led by Nelson Peltz, said it will not seek to take Wendy's (Nasdaq: WEN) private.

Why it matters: At the counter, this reflects how Wendy's has grown revenue, made C-suite changes, announced a share buyback and increased its dividend. In the kitchen, it's about Peltz turning his attention to a much more lucrative target in Disney.

Backstory: Trian has been involved with Wendy's for over a decade, with it and Peltz currently holding a 19.35% ownership stake. Last May, the firm said it was considering a takeover bid, either alone or with a third party.

The bottom line: Fast food gets more attractive to private equity in tough economic environments. Expect buyout firms to keep one eye on the burger-flipper's reorg and another on macro numbers, to see if there's a match. Note that Roark bought Arby's from Wendy's in 2011.

💭 Our thought bubble: Even at a premium to its current valuation, Wendy's might still be a bargain for the likes of Roark and its portfolio company Inspire Brands.

By the numbers: Wendy's current enterprise value based on current market cap, long-term debt, and cash and cash equivalents at the end of the third quarter is about $7 billion.

  • That would equate to a multiple of about 14x adjusted EBITDA of nearly $500 million.
  • By contrast, Inspire Brands, which is controlled by PE firm Roark Capital Group, shelled out 23x EBITDA to acquire Dunkin' in late 2020, according to reports.

Yes, but: Debt is not only harder to come by, but it's also more expensive.

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