This post is part of the Reporter’s Notebook blog.
Part of the $1.4 billion share repurchase program that The Wendy’s Company announced today is a plan to buy $211 million in stock from its largest shareholder, The Trian Group.
Trian is controlled by Nelson Peltz, Wendy’s chairman. It owns 89.4 million shares of Wendy’s, or 24.8 percent of the company’s stock. But, according to today’s announcement, Trian will be reducing those holdings to between 17 percent and 19.68 percent.
Some of that reduction in ownership will be through the sale of stock to Wendy’s, but the investment fund is also selling stock in “a third party transaction,” Wendy’s executives said on a conference call today.
Executives said that Trian is reducing its stake because of tax reasons, and the fund will remain Wendy’s largest shareholder.
“We are very pleased with Wendy’s ongoing transformation and outlook,” Peltz said in a statement. “We look forward to continuing to work closely with other members of the board, along with (CEO) Emil Brolick and his leadership team.”
Wendy’s made a separate deal with Trian, the company said, to ensure that other shareholders could participate in the company’s share buyback program, and to avoid influencing the price they receive. Wendy’s also wanted certainty with its share buyback.
Peltz has owned Wendy’s stock since 2005. As an activist, he helped push the company to sell Baja Fresh and then spin off Tim Hortons. Peltz also owned Arby’s, and engineered a purchase of Wendy’s by that company in 2008.
The marriage between the two QSR brands only lasted three years. Wendy’s sold Arby’s to Roark Capital in 2011.
In any event, Peltz’s sale of stock, tax reasons or not, is coming at a decent time: Wendy’s stock price is up by more than 150 percent over the past three years.