Dallas, Texas 12/30/2014 (FINANCIALSTRENDS) – Manitowoc Company Inc (NYSE:MTW) gained 9% in previous session, powered by activist investor Carl Icahn’s disclosure that he holds 7.77% stake in the company. Icahn also advocated for stock split, which also pushed the stock up.
Manitowoc’s stock traded with significant volumes of 12.03 million shares on Monday compared to its 30-day average trading volume of 2.09 million shares. While the stock has gained roughly 34% in second half of December, it is still trading 32% below its 52-week high of $33.38.
Activist investor bought 10.5 million shares of Manitowoc at an aggregate cost of approximately $147 million. The investment makes Icahn the third largest shareholder of the company after the mutual fund giant Fidelity and Ralph Whitworth’s Relational Investors. While Icahn pushes for split up, he and his company are yet to strike any talks with Manitowoc.
Icahn’s company also regarded Manitowoc Company Inc (NYSE:MTW)’s stock to be undervalued in an SEC filing. It mentioned that they would push for the company to consider splitting up its distinctive crane and foodservice businesses. The filing also mentioned about seeking shareholder board representation if appropriate.
Why Splitting Up?
Icahn is not the first one to push Manitowoc Company Inc (NYSE:MTW) consider splitting up. Another shareholder Relational Investors LLC that held 8.5% stake in June, also pushed for breakup.
Relational said in the June filing that Manitowoc’s crane and food service businesses materially differ in their operating metrics, which we believe to cause a perpetual discount in the share price.
Manitowoc’s subpar stock performance is attributed to weak sales in its cranes segment given the continuing decline in the boom truck and rough-terrain markets across North and Latin Americas. The company reported 6.7% sales decline in its crane segment partially offset by 3.8% increase in foodservice segment. Total third quarter sales were $986 million.