Pershing may push for Fortune Brands split

on 11/10/10 at 5:43 pm

Industry

Pershing Square Capital Management has built a stake of roughly 11% in Fortune Brands Inc. and may be eyeing a breakup of the company.

Fortune Brands shares hit a two-year high on Friday.

Pershing Square, run by Bill Ackman, is an activist investor. These types of investors sometimes push for strategic changes, including share buybacks, bigger dividends and sales of parts or all of companies.

It’s not clear why Pershing has invested in Fortune Brands /quotes/comstock/13*!fo/quotes/nls/fo (FO 55.51, +0.03, +0.05%)  . However, the company could be considered a target for activist investors because it runs three different businesses, selling home furnishings, spirits and golf balls.

With each business having little relationship to the other, Pershing may be betting that the company would be worth more if one or two of the parts were sold or spun off in some way. A representative at Pershing declined to comment on Friday.

Fortune Brands shares climbed 7.5% to $55.93 in afternoon action on Friday. The stock hit $59.40 earlier in the day. That’s the highest level since early October 2008, in the midst of the global financial crisis.

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