Fortune Brands Said to Plan Meeting With Ackman
Fortune Brands Said to Plan Meeting With Shareholder Ackman
Jonathan Fickies/Bloomberg
William "Bill" Ackman, founder and chief executive officer of Pershing Square Capital Management LP.
William "Bill" Ackman, founder and chief executive officer of Pershing Square Capital Management LP. Photographer: Jonathan Fickies/Bloomberg
Fortune Brands Inc., the maker of Jim Beam bourbon and Titleist golf balls, plans to meet with William Ackman after the activist investor bought 11 percent of the company, said four people with knowledge of the matter.
The meeting to discuss Ackman’s proposals is scheduled for next week, and both sides recently hired advisers, said the people, who declined to be named because the talks are private. Credit Suisse Group AG and investment bank Centerview Partners are advising Fortune Brands and its board, the people said. Ackman has retained investment bank Moelis & Co., they said.
Ackman’s New York-based Pershing Square Capital Management LP disclosed the stake Oct. 8 and said the stock is an undervalued, attractive investment. Ackman didn’t reveal what he will propose to the management of Deerfield, Illinois-based Fortune Brands, which has a market value of about $8.3 billion and owns products ranging from liquor to padlocks to golf clubs.
Clarkson Hine, a spokesman for Fortune Brands, declined to comment. Ackman didn’t respond to messages seeking comment.
Ackman has emerged as one of the hedge-fund industry’s most prominent activist managers, often prodding for changes such as asset sales at companies with underperforming shares. Ackman buys stock in companies he deems undervalued and then urges changes he says will boost shareholder returns. He pushed for board changes at Target Corp. and lobbied restaurant chain Wendy’s International Inc. to sell land.
Previous Offers
Fortune Brands has had offers for its assets in the past, two of the people said. The company has been approached by private-equity funds interested in acquiring Fortune Brands’ home and security division, its largest business, the people said. That unit includes Master Lock padlocks and Moen faucets.
Rival drink companies have considered an acquisition of Fortune Brands’ spirits and wine group, its second-largest business, the people said. That group owns Maker’s Mark, Canadian Club and Jim Beam.
Those efforts or plans often got hung up by concerns about the tax implications and tax bills of any deal, the people said.
Fortune Brands’ smallest division is focused on golf and includes the Titleist and FootJoy brands. The company said today that third-quarter profit fell 17 percent. Sales were little changed at $1.72 billion.
The shares dropped 67 cents, or 1.2 percent, to $54.53 yesterday in New York Stock Exchange composite trading. Fortune Brands had climbed 26 percent this year before today, compared with a 6 percent rise in the Standard & Poor’s 500 Index.
Fortune Brands began in 1864 as a tobacco company owned by the Duke family, according to Hoover’s Inc. It expanded into home products in the 1980s and added seven liquor brands from Seagram in 1991. It has owned the Jim Beam Distillery since the 1960s and exited the tobacco business in the 1990s.
To contact the reporters on this story: Jeffrey McCracken in New York at jmccracken3@bloomberg.net
To contact the editors responsible for this story: Robin Ajello at rajello@bloomberg.net; Jennifer Sondag at jsondag@bloomberg.net.
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