LOS ANGELES (Reuters) - Nelson Peltz’s Trian Partners said on Monday it is attempting to gain control of the board of directors at hamburger chain Wendy’s International Inc WEN.N, which it is attempting to buy.
Trian Partners said in a regulatory filing on Monday that it has notified Wendy’s of its intention to expand the board and to nominate director candidates at Wendy’s upcoming annual shareholders’ meeting.
If successful, Trian would seize control of Wendy’s board.
Billionaire investor Peltz’s Triarc Cos Inc TRY.N, which owns the Arby’s fast-food chain, said in November that it made a bid for Wendy’s that was below the $37 a share to $41 a share it was prepared to offer in July.
Trian Partners and its affiliates control nearly 8.6 million shares, or about 9.8 percent, of Wendy’s outstanding shares.
“The board’s review of strategic alternatives has taken more than nine months and this effort to gain control of the board may be an effort to force the issue,” Citi Investment Research analyst Glen Petraglia said in a client note.
He added that Trian’s moves also appear to be an attempt to remove Wendy’s Chief Executive Kerrii Anderson, who is up for reelection this year, from the board.
In a filing with the U.S. Securities and Exchange Commission, Trian said it will propose that Wendy’s amend its regulations to increase its board size to 15 from 13. It would also increase to six the number of directors authorized to be up for a vote at the annual meeting.
A second proposal would fix the number of board members authorized to be in different classes determined by the year their terms expire. It would also remove any board members appointed after February 4.
If Wendy’s shareholders approved the proposals, Trian Partners would nominate the following board candidates: Jerry Levin, Jeffrey Bloomberg, Ulysses Bridgeman, Kenneth Gilbert, Richard Mandell and Gregory Sachs.
If those six individuals were elected, Peltz would gain a majority on the board.
If shareholders rejected the amendment proposals, Trian said it would nominate Levin, Bridgeman, Gilbert, and Mandell for election to the board.
While this second option would not give the firm board control, it would bring its representation to six of 13 members.
If more than six directors were to be elected at the annual meeting, Trian reserved the right to nominate additional candidates. If, due to death or disability, any nominee or additional nominee were unable to stand for election at the annual meeting, Trian Partners reserved the right to nominate Michele Griffiths.
Levin, a Wendy’s director since 2006, is also chairman at Sharper Image Corp SHRP.O.
Bloomberg, a former investor banker, has been on the board of Nortek Inc since 2005.
Bridgeman is president and owner of Manna Inc, which together with other Bridgeman-owned entities, operates 160 Wendy’s restaurants.
Gilbert is a director of Trian Acquisition I Corp.
Mandell, a former Wendy’s franchisee, is also on the Trian Acquisition I board.
Sachs is a director at Deerfield Capital Corp.
Griffiths has served as an independent consultant from 1997 until 2008.
Wendy’s said on January 28 it believes it is in the final stages of reviewing its strategic options.
Last week, the hamburger chain posted a higher quarterly profit as cost-cutting helped offset a sales decline at hamburger restaurants open at least 15 months.
Wendy’s shares were up 35 cents, or 1.5 percent, at $23.50 in afternoon trading on the New York Stock Exchange.
Additional reporting by Nicole Maestri; Editing by Andre Grenon, editing by Gerald E. McCormick