Tuesday, November 15, 2005

MCD going to $40?

Bill Ackman, who is a major shareholder of MCDONALDS CP (NYSE:MCD) is trying to push up the value of MCD to $40+.

Fueled by the recent success of pushing a spin off announcement of Tim Horton's by (WEN) Wendy's International Inc. A successful coffee chain. Ackman wants similar success at the Golden Arches.

The Plan Outlines:
  • New financing and IPO proceeds would be used to refinance McDonald's existing net debt, estimated to be $5 billion at year end.
  • Funds raised would also repurchase 316 million McDonald's shares at $40 a share and pay for $300 million in fees and transaction

Somewhere between 9 and 10 thousand McDonald's locations are corporate owned, Ackman's plan would reduce this amount by over 60%.

Management at McDonald's has already rejected his plan initially, but he plans to push this restructuring and hopes to move it forward with as little hostility as possible.

You can read more here and here.

I wouldn't consider a position in MCD at its current levels, it would have to drop down below $32.50 for me to take interest. YUM seems like it is a better buy if you want to play the fast food chains.

I am not responsible for your trade decisions made or not made because of my opinion shared here. You should always do your own research before buying/selling a stock.


At 7:23 PM, Blogger Salbert said...

Mc Donalds= BAD FOOD!
I don't care about MCD when SBUX is seeing great growth, great growth!


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