| NEW YORK, June 26
NEW YORK, June 26 Activist investment firm
Relational Investors LLC has amassed a roughly 8.5 percent stake
in Manitowoc Co Inc and is urging the crane and food
equipment company to break itself up, according to people
familiar with the matter.
Relational, founded by investor Ralph Whitworth, believes
that Manitowoc should spin off its high-margin food service
equipment business into a separate entity in order to boost its
stock prices, the people said on Thursday.
The Manitowoc, Wisconsin-based company has a market
capitalization of roughly $4 billion and has two main divisions,
Manitowoc Cranes and Manitowoc Foodservice.
The company makes several lines of cranes for heavy
construction and commercial construction and also produces boom
trucks. The foodservice division makes ice machines,
refrigerators, deep fryers and other cooking equipment for
businesses such as restaurant chains.
In January, Relational met with company management to
recommend Manitowoc hire advisors to spin off its food business,
according to the people familiar with the matter. Manitowoc's
board has so far declined Relational's request for a meeting,
the people added.
The investor has argued that food equipment businesses trade
at a much higher multiple than crane companies and the
combination of two distinct businesses has led to a perpetual
discount in Manitowoc's share price, the people said.
Relational's position in the company, which is expected to
be disclosed later on Thursday, would make it the company's
second-largest shareholder, according to latest available data
by Thomson Reuters.
As of March 31, Fidelity Management & Research ranks as
Manitowoc's top shareholder with a 14.5 percent stake.
Representatives for Relational and Manitowoc could not
immediately be reached for comment.
San Diego-based Relational, which takes stakes in companies
it considers undervalued and lobbies for change, has
successfully pushed for breakups of large industrial companies
in recent years.
Most recently, aircraft seat maker and parts distributor B/E
Aerospace Inc announced moves to split into two
publicly traded companies, partly under pressure from Relational
which has reported a 3.5 percent stake in the company.
Late last year, Timken Co bowed to pressure from
investors led by Relational and agreed to spin off its steel
unit. The investment firm also successfully convinced industrial
conglomerate ITT Corp to break itself into three separate
companies in 2011.
(Reporting by Soyoung Kim in New York; Editing by Nick