By Svea Herbst-Bayliss
Activist hedge fund Blackwells Capital is preparing to challenge Wendy's Co's board of directors in a push for improvements to the fast food chain's financial performance, people familiar with the matter said on Friday.
Blackwells, run by Jason Aintabi, plans to nominate several directors to Wendy's 12-member board, said the sources, who asked not to be identified discussing confidential deliberations.
The challenge pits Blackwells against another activist hedge fund, Trian Fund Management, which owns a 16% stake in Wendy's and has three representatives -- Trian CEO Nelson Peltz, Trian President Peter May and Trian research co-head Matthew Peltz -- serving on the Dublin, Ohio-based company's board.
Blackwells antagonized Trian this week at another company -- Walt Disney Co. Blackwells issued a statement on Thursday criticizing Trian for its attempted board challenge against the entertainment giant and came out in support of Disney CEO Bob Iger.
The size of Blackwells' stake in Wendy's could not be learned. Blackwells declined to comment. Wendy's and Trian did not immediately respond to requests for comment.
Wendy's, which is worth $3.8 billion, has seen its stock price drop 15% this year amid investor concerns about decelerating growth in its same-restaurant sales. By comparison, competitor McDonald's Corp's stock price has risen 7.33%, Shake Shack Inc's is up 46% and Restaurant Brands International Inc, which owns Burger King and other fast food chains, has climbed 11% this year.
Blackwells made headlines last year when Aintabi pushed exercise bike maker Peloton Interactive Inc to fire its CEO John Foley and to explore a sale. Peloton replaced Foley but has not sold itself.
Trian explored taking Wendy's private last year but announced in January that it would no longer pursue this option.
Wendy's reported adjusted third-quarter earnings per share of 27 cents last month, beating analysts' average estimate of 25 cents. Yet it posted same-restaurant sales growth of 2.8% globally and 2.2% for the United States that were lower than a year ago. In third quarter of 2022, Wendy's had reported global same-restaurant sales growth of 6.9% and U.S. same-restaurant sales growth of 6.4%.
(Reporting by Svea Herbst-Bayliss in Rhode Island; Editing by Chizu Nomiyama)
