It only took a month for Carl Icahn’s latest activist move to pay big dividends, as Manitowoc Company Inc (NYSE:MTW) announced in an 8-K filing with the SEC on Thursday that it would split its business into two following pressure from two activist hedge fund shareholders: Icahn’s Icahn Capital LP, and Ralph V. Whitworth’s Relational Investors. Icahn owns 10.58 million shares of Manitowoc, 7.81% of all common shares, while Relational owns 11.05 million shares, 8.15% of all common shares.
As we reported at the end of last month, Icahn had just announced his new activist position in Manitowoc Company Inc (NYSE:MTW), and expressed his intentions to push the company to split its crane and foodservice divisions into separate businesses, unlocking shareholder value. It’s a position that had already been taken by Relational, which acquired their activist stake in the Wisconsis-based manufacturer in June, 2014, and expressed the belief that their divisions were synergistically opposed, which was causing a perpetual discount in the company’s share price and market cap.
Manitowoc Company Inc (NYSE:MTW), with a current market cap of $2.61 billion, eventually agreed that splitting its assets into two separate companies would result in unlocking the full potential and value of each, and plans to complete the split by the first quarter of 2016. The company’s shares, which were down 10.3% year-to-date, are up nearly 4% in after-hours trading heading into Friday on the news.
The split is just the latest successful bit of activist investing for legendary investor Carl Icahn, whose mere ownership presence in companies now often heralds a rise in the stock’s price, as investors value Icahn’s track record of success at exerting pressure on companies to reform their businesses to the benefit of shareholders.
Some of Icahn’s recent moves have included successfully pushing Family Dollar Stores Inc. (NYSE:FDO) to sell itself after taking an activist position in that company, which they eventually did to Dollar Tree, Inc. (NASDAQ:DLTR); successfully pushing eBay Inc (NASDAQ:EBAY) to spin off its PayPal division; and successfully nominating three directors to the board of Hertz Global Holdings Inc. (NYSE:HTZ), as well as pushing for seats on the board of Gannett Co., Inc. (NYSE:GCI) after that company agreed to split just ahead of his taking an activist position.