McDonald's to Exit Chipotle
After the market closed Thursday, McDonald's said it expects to sell around 5 million Chipotle shares within the next two months and use the proceeds to buy back its own stock. The burger seller said its separation would be completed later this year through a tax-free exchange of Chipotle shares for McDonald's common stock.
McDonald's said the shares acquired through the transactions would be "over and above" its promise to return $5 billion to $6 billion to shareholders through dividends and share repurchases this year and next.
McDonald's took Chipotle public in January. At the time, it said it would retain an 88% voting interest in Chipotle and a 69% economic interest following the initial public offering."Since we made our initial investment in 1998, Chipotle has grown from 16 restaurants in the Denver area to a strong and popular restaurant concept with more than 500 locations throughout the U.S.," Jim Skinner, the chief executive of McDonald's, said in a statement. He added that "now is the time to further sharpen our focus on Brand McDonald's and build on the momentum and alignment we've achieved under McDonald's Plan to Win." Chipotle closed down $1.05, or 2%, at $51.10. McDonald's rose 26 cents to $34.11 in regular trading and gave back a penny after hours.
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