Hedge fund Pershing Square Capital Management LP, which holds a 4.5% stake in McDonald's Corp., presented on Wednesday, Jan. 18, a revised proposal for restructuring the burger chain into two businesses: a franchiser and a restaurant mangement business called McOpCo.
Pershing's William Ackman unveiled the plan to analysts in New York, saying it would boost McDonald's share price to $46 to $50 even before potential operating improvements at the under-performing restaurant business. Ackman contended that his latest plan addresses concerns McDonald's management and franchise operators had about a version Ackman tabled in November.
The nut of the proposal is to sell 20% of McOpCo in an initial public offering to establish it as a distinct operation from the brand management operation, which would continue to collect rent and fees from McDonald's franchises.
McDonald's management didn't bite. Instead, it announced it would unveil its own restructuring plan on Jan. 24. —Scott Stuart
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