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[video] Bill Ackman's Pershing Square Tastes Victory in $16B Beam Takeover


The remaining business, Fortune Brands' alcohol brands, continued to trade on the New York Stock Exchange and was renamed Beam Inc. to reflect its alcohol focus.

Those split-offs were praised by Ackman's value investing peers. At the Berkshire Hathaway (BRK.A) annual shareholder meeting in May 2013, Ackman's advocacy for a stream-lined Fortune Brands was given a deal-making award from the Heilbrunn Center for Graham & Dodd Investing at the Columbia University Business School.

Since then, Fortune Brands legacy businesses have all performed strongly in their independent listing on stock markets, capped off by Suntory's Monday takeover of Beam.

As of the third quarter, Pershing Square held a 12.77% stake in Beam, according to filings with the Security and Exchange Commission, making it the largest investor in the company.

Beam's takeover may help raise the valuations of competitors such as Brown Forman (BF.A) and Constellation Brands (STZ). Applying the 20 times earnings before interest, taxes, depreciation and amortization multiple that Suntory is using in its Beam bid would yield a valuation of $92 a share for Brown Forman and $100 a share for Constellation Brands, according to Timothy Ramey, an analyst with D.A. Davidson & Co.

Ackman has received criticism for a failed management revamp of J.C. Penney (JCP), which put the company on the doorstep of bankruptcy. He's also received criticism for advocating a short against supplements seller Herbalife (HLF), which has lost hundreds of millions of dollars as prominent investors take the other side of his trade.

On the other hand, Beam's sale to Suntory and the strong performance of Fortune Brands Home & Security represent some of Ackman's best investing work since the crisis. Monday's deal puts Ackman on a strong start in 2014 after a rough 12-months.

Pershing Square couldn't immediately be reached for comment.

-- Written by Antoine Gara in New York

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