Carl Icahn (Trades, Portfolio) has reported receipt of 10,582,660 shares of equipment company Manitowoc Foodservice Inc. (MFC, Financial), a spin-off that he helped orchestrate from the former farm equipment-slash-foodservice company, Manitowoc Co. Inc. (MTW, Financial).
Icahn sprung his classic campaign on Manitowoc in December 2014, taking a 7.77% stake and making known his aim to divide the company in two. The company acquiesced to Icahn’s plan (Larry Robbins (Trades, Portfolio) of Glenview Capital joined him on the endeavor) on Feb. 11. Shareholders received one free share of the new company for each share of the crane company they owned, meaning Icahn has an equal amount of shares of both companies.
“With the operational preparation complete, the Board of Directors' authorization of the spin of Manitowoc Foodservice marks the final phase of a year-long process to create two, industry-leading, public companies,” Kennet W. Krueger, Manitowoc chairman and interim CEO said in a statement.
The spin-off was completed on March 4, the day Icahn reported his shareholding. Now he has the option of taking one board seat on each company as per an agreement reached Feb. 9. The company also waived a Wisconsin statute that lifted his ownership cap from 10% to 14.99%.
“We strongly believe that the separation of Manitowoc’s core businesses will create two stronger companies and that, in combination with improved corporate governance, shareholder value will be greatly enhanced by this agreement,” Icahn said in a statement.
Manitowoc Foodservice shares have gained 10% since they started trading on Feb. 11, closing at $4.22 per share Tuesday.
Icahn had already reported ownership of the spin-off shares in his fourth-quarter portfolio filing but also reported the holding in a 13D (active stake) last week.
Manitowoc has a P/E ration close to a three-year high of 9.2 and P/S ration close to a one-year high of 0.17.
In the fourth quarter its revenue fell to $935 million from $1.4 billion in last year’s fourth quarter, earnings per share rose to 32 cents from 35 cents in the same period. The company had only one year absent free cash flow in the past decade, while its share price declined roughly 17% in the decade leading up to the spin-off, and 22% for five years.
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