Wendy’s shares up 15% on Wednesday: what’s fuelling the stock?

Shares of Wendy’s Co (NASDAQ: WEN) are up nearly 15% on Wednesday after Trian Fund Management LP said it was interested in taking over the American fast-food chain.

Why is Trian exploring a potential deal?

The hedge fund already has a 19% stake in Wendy’s that makes it the firm’s largest shareholder. Trian is exploring a potential merger or acquisition to “enhance shareholder value”.

The asset management company has Wendy’s on its portfolio since 2005. But in a recent SEC filing, Trian said:

The Dublin-headquartered company is still trading more than 20% down versus the start of the year.

MKM Partners sees another 25% upside in WEN

At present, Trian has three board seats at Wendy’s. It has previously pushed the fast-food company to cut its overhead costs and improve operations.

Earlier in May, the Nasdaq-listed company reported its financial results for the first quarter that came in shy of Wall Street estimates. According to MKM Partners, a potential deal could see the stock climb further from here.

MKM analyst Brett Levy rates Wendy’s at “buy” with a price target of $23 a share, or another 25% upside from here.