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Ingersoll-Rand considers Peltz plan

by Lou Whiteman  |  Published August 3, 2012 at 11:45 AM
IngersollRand_227x128.jpgIndustrial conglomerate Ingersoll-Rand plc said Friday, Aug. 3, it was exploring a range of strategic options for the company, including a plan submitted by activist investor Nelson Peltz.

Peltz's Trian Fund Management LP in May disclosed a 7.33% stake in Dublin-based Ingersoll-Rand, with the investor saying in the filing that he considered shares of the company to be undervalued and that he intends to meet with management. The investor declined an invitation to join the company's board in June, citing restrictions requested by the company, but Ingersoll-Rand's statement on Friday signals that talks are continuing.

The company, a maker of specialty tools, golf carts, security products and heating, ventilation and air conditioning equipment, said its board considered various options at a regularly scheduled meeting held August 2. The board will continue deliberations and expects to complete its review by year's end.

As part of those talks Ingersoll-Rand held what the company called "substantial discussions" with Peltz, and said it has made key executives and advisers available to the investor and his team.

"We are continuing our detailed evaluation of the strategic opportunities to drive growth and shareholder value, including the proposals presented by Trian as well as other alternatives identified by the board," company chairman and CEO Michael W. Lamach said in a statement. "This review involves significant work by the management team and our advisors to ensure the Board has the benefit of all relevant information and data."

Some analysts had been arguing for a breakup of Ingersoll-Rand well before Peltz disclosed his stake, believing that the firm's businesses on a standalone basis would be valued higher by the market than the company's $12.9 billion market capitalization.

Ingersoll-Rand took one step towards a breakup last year, selling its interest in a stationary refrigerated display case unit to Clayton, Dubilier & Rice LLC for $370 million, but has not yet taken any further action.

Shares of Ingersoll-Rand traded up less than 1% on Friday morning, to $41.96. The stock traded above $45 per share briefly back in May on the Peltz disclosure.
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Tags: Ingersoll-Rand plc | M&A | Nelson Peltz

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