Wendy's, the third-largest hamburger chain in the U.S., is up for sale.

After a receiving little reaction from shareholders after spinning off its most profitable unit, the company, worth $3.3 billion, said its board of directors has formed a committee to consider options including a sale, merger or change in strategy.

After pressure from billionaire investor Nelson Peltz and former shareholder William Ackman to raise its stock price, the company decided to spin off its coffee and doughnut chain, Tim Hortons, and sell its Baja Fresh chain last year. Tim Hortons, a Canadian chain, contributed more than half of Wendy's operating profit in 2005.

"People have been kicking the tires and suggesting that it's undervalued," said Ron Paul, president of Chicago-based restaurant consultant Technomic Inc. "The board probably felt they had little choice." Wendy's could be the target of a leveraged buyout, says Paul, adding that it could be too expensive for Yum! Brands, the owner of Pizza Hut, KFC and Taco Bell.

Wendy's International Inc., the third-largest U.S. hamburger chain, put itself up for sale after a spinoff of the company's most profitable unit failed to boost the shares. The stock rose as much as 15 percent.

Wendy's, valued at $3.3 billion on the stock market, said yesterday it formed a board committee to consider options including a sale, merger or change in strategy.

(Continue reading this story on Bloomberg)

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