(Reuters) - Nelson Peltz's Trian Group said it planned to reduce its stake in hamburger chain Wendy's Co to 17.0-19.7 percent in the "next few months" from 24.8 percent.
As a part of the plan, Wendy's will buy back $211 million of its shares from Trian, its largest shareholder, under a $1.4 billion share buyback program it announced on Wednesday.
Wendy's shares rose about 4 percent in heavy premarket trading.
Trian's decision to sell the shares is a result of some adjustments the hedge fund is making to its portfolio, Peltz said in a joint statement.
The number of shares Trian plans to sell is aimed at reducing its holding in Wendy's by at least 20 percent to "avoid adverse federal income tax consequences," the hedge fund said in a regulatory filing. (http://1.usa.gov/1BKvV8j)
Wendy's had 363.5 million shares outstanding as of May 29. On this basis, Trian holds about 90 million shares in the restaurant chain.
Wendy's launched an $850 million share buyback program on Wednesday as part of its repurchase plan that it intends to complete by the end of 2016.
The company also adjusted its full-year earnings forecast to reflect the sale of its bakery operations.
Wendy's said it expected 2015 adjusted earnings of 31-33 cents per share, excluding about 2 cents per share attributable to its bakery operations.
The company received after-tax proceeds of about $50 million from the sale of its bakery operations, announced in May.
Wendy's shares were trading at $11.50 before the bell.
(Reporting by Yashaswini Swamynathan and Sruthi Ramakrishnan in Bengaluru; Editing by Kirti Pandey)
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