What happened

Shares of fast-food chain The Wendy's Company (WEN -0.50%) popped on Wednesday following news that its largest shareholder might be looking to acquire the company outright. As of noon ET today, the stock was up 11%.

So what

Trian Fund Management owns over 25 million shares of Wendy's, according to its filings with the Securities and Exchange Commission (SEC) on May 13. But the fund filed an amended Schedule 13D with the SEC yesterday. This form suggests the hedge fund is preparing to make a major proposal to Wendy's management.

A Wendy's Double Stack burger.

A Wendy's burger. Image source: Wendy's.

The filing is sparse on details. About the most concrete line from it says that it's looking into a "potential transaction with respect to the Company to enhance shareholder value." But it doesn't necessarily mean that Trian Fund Management would buy out Wendy's. Other options are on the table.

Now what

Many analysts have price targets on Wendy's stock in the mid-$20 range and are keeping these targets intact today. Stifel analyst Chris O'Cull believes a buyout would happen in the low $20 range, according to The Fly. That would still provide investors today with considerable upside, if indeed Trian intends to make an offer for Wendy's.

However, anyone considering the stock on today's news will want to keep in mind that a potential deal and the potential buyout price is still speculative at this point. I'd recommend thinking through whether Wendy's is a stock you'd be comfortable buying and holding for the long term if a deal doesn't ultimately materialize.