A New York investment firm is asking Wendy’s International to spin off of its Tim Hortons bakery unit as part of a broad proposal aimed at boosting the fastfood chain’s share price, according to the Reuters news agency.

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William Ackman of Pershing Square Capital Management which holds a 9.9% stake in Wendy’s, on Monday sent a letter to Wendy’s Chief Executive Jack Schuessler asking for a meeting to discuss his recommended restructuring actions. The investment firm disclosed the letter in a filing with the US Securities and Exchange Commission.


Pershing Square has steadily increased its stake in Wendy’s over the last several months. In June, it hired private equity firm Blackstone Group LP to help it suggest restructuring actions for Wendy’s. But the disclosure on Tuesday marks the first time the firm has laid out a specific course of action.


“Wendy’s stock is currently undervalued …,” Ackman said in the letter. “If the company were to implement certain strategic initiatives, substantial shareholder value will be created.”


Ackman’s proposal includes franchising company-owned Wendy’s restaurants and buying back stock. He also asked Wendy’s to put off making any acquisitions, citing speculation that the company was in talks to buy Allied Domecq Plc’s restaurant business, which includes the Dunkin’ Donuts, Baskin Robbins and Togo’s chains.
“We believe that such a significant acquisition would distract management from … focusing managerial resources on its core business,” Ackman said.

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Wendy’s spokesman Bob Bertini declined to comment on the letter, which said the chain’s management has repeatedly denied Pershing’s requests to hold a meeting.