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McDonald's Placates Pershing

The hedge fund says it will drop its fight after the fast-food chain addresses much of its criticism.

An activist hedge fund has given up its battle with

McDonald's

(MCD) - Get McDonald's Corporation Report

after the company's management outlined proposals that addressed much of its criticism.

Pershing Square Capital, which owns 4.5% of the burger giant, mostly through deep-in-the-money options, had called for McDonald's to spin off 20% of its company-operated restaurants into a new company and to sell off 1,000 of those company-owned stores to franchisees.

On its

earnings call Tuesday, McDonald's said it plans to refranchise 800 restaurants in U.K. over the next few years, along with another 1,500 restaurants globally that would be set for refranchising and real estate sales.

"We are supporting McDonald's because they're doing the right thing," Bill Ackman, Pershing's manager, told

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Wednesday.

Ackman also wanted McDonald's to provide more disclosure on the performance of its company-operated restaurant division, known as McOpCo, which Ackman had criticized as being an underperformer relative to the franchise business.

McDonald's on Tuesday said it would provide better supplemental financial data on how the McOpCo restaurants are performing compared with the franchisees, starting with its 10-K filing in about six weeks. The details of the plan were vague, other than that the company will provide some additional numbers for investors to crunch.

"They've pretty much given us everything we wanted," Ackman says. "The only thing we didn't get, which we felt would have given more instant value, would've been a true separation for McOpCo," he says.

Ackman also liked the company's pledge to buy back $1 billion of stock in the first quarter.

McDonald's stock price is still nowhere near the levels Ackman had projected with his plan. Ackman had claimed his proposal would add about $10 to $15 in value to McDonald's stock. But the stock is up only a couple bucks since he went public with his criticism last fall.

"It's going to get there, it's just going to take longer," he says of the price difference.

McDonald's shares recently were down 90 cents, or 2.5%, to $34.95.