Moen

Jim Beam Parent Fortune Brands Set For Breakup

Filed under: Spirits

Fortune Brands (NYSE-FO), according to press reports in The Wall Street Journal and Associated Press is planning to spin off its golf and home security businesses to shareholders, while maintaining its portfolio of liquor brands, including Jim Beam Brands, Maker's Mark, Courvoisier Cognac, Laphroaig single-malt Scotch whisky and Harvey's Sherry, as a public company.

The company will spin off its golf products business, led by Titleist, as well as its security business led by the MasterLock brand. It's home products business, also to be spun off, includes Moen plumbing fixtures.

The spirits business is about a 2.5 billion operation in terms of annual revenues.

Fortune Brands board of directors has been pressured to maximize the value of the company by activist investor Bill Ackman, founder of Pershing Square Capital Management, who holds an 11% stake in the company.

Fortune Brands has long been viewed as a 20th-century style conglomerate ripe for break-up. It's disparate businesses have no real synergies and are worth more broken up than hey are run together, Ackman has argued.

Fortune Brands is trading around its 52-week high of $61 a share, up substantially from its 52-week low of $37.05. Ackman's intervention has been the chief driver of the stock.

Tags: Fortune Brands FO, Jim Beam, Laphroaig, Makers Mark, Moen, Titleist

Fortune Brands Breakup Would Put Premium Spirits Brands In Play

by David Kiley (RSS feed) —

Filed under: Spirits

Activist investor Bill Ackman has been given a four-week deadline to propose changes to the board of Fortune Brands, the company that is parent to Jim Beam, Maker's Mark, Laphroaig and Courvosier, as well as Pinnacle and Scotty Cameron golf equipment, which could lead to the break-up of the conglomerate.

Since disclosing his holding last month, Mr Ackman, founder of Pershing Square Capital Management, has kept quiet about his plans. However, his record suggests he wants Fortune's board to explore breaking up its stable of consumer brands starting with its spirits business, which includes Jim Beam whiskey and that distillery's small-batch Bourbon brands, and Courvoisier cognac.

Ackman holds an 11% stake in the company, which has always been viewed as an odd throw-back type conglomerate of disassociated businesses. Besides the spirits brands, and golf equipment, Fortune also operates home and home-security businesses and brands such as Moen, Masterlock, as well as kitchen cabinet brands.

In the past month, Ackman has held talks with Fortune's management about its corporate structure, shareholder value, etc. Ackman has four weeks to file a slate of his own candidates for the company's board to be voted on at the general meeting in April.

The most obvious buyers of FB's liquor businesses are drinks giants Diageo and Pernod Ricard of France. Gruppo Campari, which owns Wild Turkey and other brands, also could be interested in acquiring some of the brands. Bacardi would also be a factor in bidding. It is possible that Fortune Brands spirits brands would go to different companies, each looking for its own strategic additions.

Fortune's other brands include Cruzan Rum, Canadian Club, Effen Vodka, Ardmore single-malt, Harvey's Bristol Cream Sherry, Teacher's Scotch Whiskey and DeKuyper spirits.

Fortune Brands shares are trading around $60.00, up more than 10% since October 7, and up from its 52-week low of $37.05

Tags: alcohol, Bill Ackman, bourbon, Courvosier, Fortune Brands, Jim Beam, Knob Creek, Laphroaig, Makers Mark, Masterlock, Moen, Pinnacle, scotty cameron, spirits, whiskey, whisky