Real Estate Sell Off Rumors Follow McD’s
By George Anderson
McDonald’s CEO Jim Skinner says the company is not interested in spinning-off any of its real estate holdings but that doesn’t mean that some of its shareholders don’t have a different idea.
Vornado Realty Trust would appear as likely to fall under that column. The company now owns a 1.2 percent share in McDonald’s and it has created an empire by selling off assets of troubled retailers and other companies.
McDonald’s management remains committed to the course it has set.
In a letter to its franchisees and employees, Mr. Skinner wrote, “We have no intention to undertake a large scale restructuring either through a McOpCo spin-off or a Real Estate Investment Trust (REIT). Neither would be in the best interests of our system or our shareholders.”
He added, “We will deliver value to our system and our shareholders by succeeding at being better, not just bigger. We will stay focused on the Plan to Win – driven by operational excellence, leadership marketing and financial discipline.”
Separately, Mary Kay Shaw, vice president of investor relations for McDonald’s, said, “We constantly evaluate means to create shareholder value but we believe that the best way to build value and business momentum is by moving forward with this successful, strategic plan, which we will do.”
Timothy Ghriskey, president of Ghriskey Capital Partners, said it was “ludicrous” to think McDonald’s was going to get pushed into doing anything.
If a restructuring were to happen it would be a mistake, said Mr. Ghriskey.
“McDonald’s is all about control,” he said. “They control the product, they control the stores … and everybody’s got to tow the line. If this effectively becomes two companies, you’re giving up some control.”
Moderator’s Comment: Will the talk about some shareholders wanting to restructure its business or find ways to leverage its real estate assets slow McDonald’s
momentum? How does Jim Skinner manage the company in this environment? –
George Anderson – Moderator
- McDonald’s CEO Jim Skinner’s Letter to McDonald’s System 10/31/2005 – McDonald’s
- Vornado Realty Trust takes big stake in McDonald’s – The Associated Press/Crain’s Chicago
- Vornado buys 1.2 pct. stake in McDonald’s – The Associated Press/Seattle