Billionaire investor Nelson Peltz makes move to buy struggling Wendy's

Wendy's ( WEN ) may be cooking up burgers for a billionaire soon.

Longtime Wendy's investor and former chairman Nelson Peltz of Trian Partners has reportedly offered $1.4 billion to buy the struggling fast food giant , according to an SEC filing.

Wendy's shares rose 15% in early trading. The company's market cap was $1.17 billion prior to the deal.

A Wendy's spokesperson didn't return a request for comment. A spokesperson for Trian Partners didn't return a request for comment.

Billionaire Peltz — while familiar with the operations — would essentially be buying a dumpster fire.

After nearly two years of struggles competing with the likes of behemoths McDonald's ( MCD ) and Yum! Brands' ( YUM ) Taco Bell, plus upstarts such as Shake Shack ( SHAK ), Wendy's is on the cusp of a large number of restaurant closures.

"With one of its largest franchisees filing bankruptcy in September (although contested by WEN given prior termination of franchise agreement), we think investors likely expect closures to tick higher than expected, but we admit visibility on our side remains somewhat limited and there could still be a range of outcomes," veteran restaurant analyst Andy Barish warned in a recent note.

"That said," he added, "given our view that there are likely additional franchise operators in the system facing challenges with leveraged balance sheets, higher interest rates and profitability pressures from higher beef, labor & build costs (like many others in QSR), we think it is prudent to moderate our development estimates and bake in more potential closures over the next 6-12 months, as the company works to strengthen its system."

Meritage Hospitality Group, one of Wendy's largest franchise operators, with more than 300 locations, filed for Chapter 11 bankruptcy protection in September following severe margin pressures and an escalating dispute with corporate headquarters. The company reportedly initiated plans to shutter at least 41 locations. Reports emerged this week that it could close up to 60.

The high-profile bankruptcy only added grease to the smoldering fire that is the Wendy's restaurant base.

Franchisees had already been closing their locations and heading for the hills.

Buried inside Wendy's brutal second quarter earnings call was a mention that 289 locations closed in the US during the first half of the year.

There are about 5,700 Wendy's in the US, and Barish estimated the Wendy's US store base will be around 5,600 by the end of 2027.

The decision on how many more locations will be closed falls on new CEO Bob Wright, who hasn't hidden his view that Wendy's needs to focus on more profitable locations.