Activist investor William Ackman, head of New York-based Pershing Square Capital Management LP, teamed up with a former associate to acquire a 9.9 percent stake in Alexander & Baldwin Inc., a regulatory filing shows.
Ackman and Richard McGuire, the managing member of Marcato Capital Management LLC in San Francisco, spent $168.8 million to purchase 4.1 million common shares, according to a Schedule 13D filed today with the U.S. Securities and Exchange Commission. That works out to an average of $41.04 a share.
Alexander & Baldwin is based in Honolulu and owns about 87,840 acres on various Hawaiian islands, its most recent annual report shows. The company also provides container ship service between the western U.S., Guam and China.
Ackman and McGuire “expect to engage in discussions with management, the board, and other stockholders,” according to the filing. McGuire, a former partner at Pershing Square, started his own hedge fund last year with backing from a unit of New York-based Blackstone Group LP.
McGuire, known as “Mick,” declined to comment through a representative at his firm. Neither Ackman nor Bethany Norvell, a spokeswoman for Pershing Square, immediately returned a call seeking comment.
Suzy Hollinger, a spokeswoman for Alexander & Baldwin, said the company was aware of the filing and looked forward to “constructive” dialog with the investors. She said the company already held talks with representatives from Marcato, while declining to elaborate.
Ackman invests in companies he deems undervalued and then urges changes he says will boost shareholder returns. Since last fall, he has bought stakes in Fortune Brands Inc., the maker of Jim Beam bourbon and Titleist golf balls, and J.C. Penney Co., the third-largest department store chain in the U.S.
Pershing Square has also invested in real estate companies such as General Growth Properties Inc. Ackman was part of an investor group that committed more than $8 billion to bring the mall owner out of bankruptcy last year.
In addition to the Alexander & Baldwin shares purchased outright, Pershing Square and Marcato have economic interest in about 372,900 common shares through total return swaps that will be settled in cash, according to the filing. The swaps, which have a reference price of $45.12 a share, raise the investment group’s economic stake to about 11 percent of shares outstanding.
Alexander & Baldwin rose 9.3 percent to $49.88 at 5:58 p.m. New York time on electronic markets after the close of regular U.S. trading.