Bill Ackman Raising Funds to Take $2B Bite Out of MacDonald's

According to reports from Bloomberg, McDonald's Corp. (MCD) investor Bill Ackman, through his Pershing Square Capital fund, plans to buy more than $2 billion of the stock, and may wage a proxy fight to pressure the company to take various actions to raise the stock price.

Earlier in the month, McDonald's said it was notified that three investment funds managed by Pershing Square Capital Management L.P. or its affiliates planned to file on or about August 15, 2006 necessary notifications under the Hart-Scott-Rodino Antitrust Improvements Act to acquire in excess of $793.8 million of McDonald's common stock.

Last year, Bill Ackman pushed the company to spin off 65 percent of its company-owned restaurants in a stock offering. Ackman later backed off after the company said it would take a number of steps to improve value including a $1 billion buyback and licensing 1,500 restaurants. Ackman was also instrumental in getting Wendy's International (WEN) to make aggressive changes, including spinning off its Tim Horton's (THI) chain.

This morning, McDonald's boosted its dividend nearly 50% to an annual rate of $1 per share, and said they expect to return at least $10 billion to shareholders through dividends and share repurchases in 2006 through 2008.

Shares of McDonald's are 1.3% higher to $39.56 in early action Wednesday, a new 52-week high.

Related: Bloomberg story • Bloomberg: McDonald's Shares Worth in $40-$50 Range • Restaurant Stocks: Gross & Operating Margins • Has McDonald's Given Up on Growth? • Speculation over Pershing's intentions • Key competitors: Burger King Corp. (BKC), Wendy's International Inc. (WEN) • ETFs: PowerShares Dyn Leisure & Entertainment ETF (PEJ) [5.9%], PowerShares High Growth Rate Dividend Achievment ETF (PHJ) [4.1%], Consumer Discretionary SPDR ETF (XLY) [3.9%] • More 13d posts by Lon Juricic • Comment on this article