Icahn proposes splitting up Manitowoc
Carl Icahn is one of Wall Streetâ€™s most influential investors. A 13D filed with the SEC on December 29 said the activist investor had acquired a 7.77% stake in Manitowoc (MTW). Icahn plans to push Manitowoc to break itself up into two companies.
Relationalâ€™s ability to pursue the breakup plan has been hampered by the health challenges of its co-founder Ralph Whitworth. Reports in October noted the fundâ€™s plans to shut down and liquidate its current portfolio and relaunch in 2015 under new management.
MTW shares rose over 11% in premarket trading ahead of news of Icahnâ€™s disclosure. MTW shares have tumbled ~40% since July. Shares had fallen about 11% in 2014, compared with a 10% rise in the Dow Jones Industrial Average.
Manitowoc is a multi-industry capital goods manufacturer.Â It operatesÂ in two principal markets:
- Cranes and related products
- Foodservice equipment
Icahn and Manitowoc
According to Icahn, MTW shares are undervalued. The investor plans to pursue discussions with MTWâ€™s management and the board to separate Manitowocâ€™s crane and foodservice segments into two separate companies. He would seek shareholder board representation â€œif appropriateâ€.
Icahn now owns 10.5 million shares of MTW worth $146.6 million. Icahnâ€™s stake makes him the third largest investor in Manitowoc, after Fidelity Management and Research and Relational Investors.
Icahnâ€™s recent successes
In January, Icahn started calling for eBayÂ Inc. (EBAY)Â to split up and spin off its PayPal business. In late September, the company said it wasÂ the â€œright time to createÂ two world class independent platforms.â€
Icahn has been pushing Apple Inc. (AAPL) to increase the pace of its share buybacks since he took a stake in the summer of 2013. In April, Apple added $30 billion to its buyback program.
Family Dollar Stores (FDO) announced a sale shortly after Mr. Icahn revealed his stake in April. The publishing company Gannett Company (GCI) said it planned to separate its publishing and broadcast divisions after Icahnâ€™s disclosure in Gannett.
In the upcoming parts of this series, weâ€™ll discuss Manitowocâ€™s businesses and how the company is creating value for its shareholders.