Reuters – Pershing Square Capital Management on Wednesday said it dropped its activist campaign against McDonald’s Corp. (MCD.N: Quote, Profile, Research) and threw its support behind the growth plan the fast-food chain outlined on Tuesday.
McDonald’s stock fell after Pershing’s disclosure. The stock slid 71 cents, or 1.9 percent, to $35.14 on the New York Stock Exchange in late-afternoon trading.
The hedge fund, which holds shares and options worth 4.9 percent of McDonald’s, has in recent months pressed the world’s largest restaurant chain to spin off a portion of its company-owned restaurant unit and invest more in developing markets.
Pershing founder Bill Ackman, in a high-profile campaign, had also urged the company to sell a portion of its 8,000 or so company-owned restaurants to franchisees and increase financial reporting transparency.
McDonald’s initially rejected Pershing’s proposals, which came amid a spate of “activist” shareholder campaigns directed at other companies, including fast-food competitor Wendy’s International Inc. (WEN.N: Quote, Profile, Research).
But Tuesday, McDonald’s said it would take a number of measures that Ackman said he supports, even though the company stopped short of promising any spin-off of its “McOpCo” division, which operates the company-owned restaurants. Ackman previously said he was open to alternative company proposals.
