It's always thrilling when someone of Carl Icahn's acumen weighs in and endorses the break-up case of Manitowoc (MTW), which I have been pushing for several years.
Why does this break-up work so well? In part because the market wants a "pure play" on construction right now with the U.S. coming back in non-residential construction and a cheap oil boom jumpstarting heavily reliant Asian countries. And in part because the long-dormant restaurant business is going back into growth mode, again because of cheap oil. Who wouldn't want a supplier to that industry right now?
Trying to break up MTW would not be in keeping with the new style activism that seems to go after winners not losers, as MTW has been.
My favorite "winning" play would be to push for the breakup of Jack in the Box (JACK) and its Mexican food restaurant chain Qdoba. JACK has long been one of my -- and the market's -- favorite restaurant chains. Qdoba had long been an underperformer but it's been going gangbusters of late. However, who can tell given the strength of the stock that Qdoba is doing so well? That's why in my speech for The Deal I mentioned this potential McDonald's (MCD) or Chipotle (CMG) type of break-up. You can see the positives of a potential break-up occurring with Bob Evans (BOBE) right now and we know that a Red Lobster-free Darden's (DRI) been on fire.
So a Jack split would be instantly rewarding.
Morgan Stanley put out a piece talking about MTW being fully valued with some upside on a split. I think that MTW will most likely have another weak quarter, but you have to see this company as a restaurant supplier going into a mini-restaurant boom and a crane supplier going into a non-residential construction renaissance. That means you should win no matter what. Which is exactly what I think Carl Icahn might be thinking at this very moment.