Trian's Nelson Peltz says Wendy's shares undervalued

Feb 18 (Reuters) - Activist investor Nelson Peltz said in an SEC filing on Wednesday that the fast-food chain Wendy's WEN.O stock is currently undervalued, sending its shares up as much as 18.6%.

According to the filing, Peltz's Trian Fund Management has spoken with possible financing sources, co-investors, and strategic partners about potential deals including an acquisition or other major transactions that could give the firm control of the company.

Back in 2022, Peltz had considered a potential takeover bid for the burger chain.

Peltz also disclosed on Wednesday that he could enter into "financial instruments or other agreements" with institutional or other counterparties that would increase or decrease Peltz's economic exposure with respect to their investment in Wendy's.

He currently holds a 16.24% stake in Wendy's, up from 16.09% held in July last year. The investment firm's stake also rose to 7.85% from 7.78% in July last year.

Wendy's said its board would review any proposal from Trian Partners in line with its fiduciary duties, adding that it is moving quickly on its turnaround plan to improve its U.S. operations while growing internationally.

The Dublin, Ohio-based company has struggled with persistent sales declines in the past quarters, owing to weak demand at its restaurants amid muted spending. Its same-restaurant sales in the U.S. fell 11.3% in the quarter ended December 28, after growing 4.1% a year ago.

Meanwhile, rivals such as burger giant McDonald's MCD.N and Taco Bell owner Yum Brands YUM.N have managed to lift sales on the back of strategies such as adding value meals and bringing in menu innovations.

Wendy's forward price-to-earnings ratio for the next 12 months, a common benchmark for valuing stocks, was 11.05, compared with 24.36 for McDonald's and Yum Brands' 23.74.