Hedge fund manager William Ackman said he plans to unveil a revised proposal to split up McDonald’s Corp. next week, setting off what’s expected to be a battle to win support from the restaurantchain’s franchisees.
Mr. Ackman, whose Pershing Square L.P. hedge fund holds shares and options equal to 4.9% of McDonald’s common stock, rattled the Oakbrookâ€â€based company in November by proposing the company spin off a 65% stake in its company-operated stores and borrow $15 billion to finance a massive share repurchase to help boost the company’s stock price.
McDonald’s rejected Mr. Ackman’s proposal saying it would threaten the company’s relationship with the people who operate 22,000 of its 31,000 restaurants, adding the plan amounted to ‘financial engineering.’
But Mr. Ackman vowed to listen to McDonald’s objections and revise his plan to unlock what he believes is the tremendous value in real estate underneath McDonald’s restaurants. The revisions are expected to be “franchisee friendly.†Support from this group would give Mr. Ackman strategic leverage in dealing with McDonald’s since the chain would not want to be at odds with a majority of its store owners.
