McDonald's ( MCD) said Monday that it has no plans for a large-scale restructuring, sending its stock down more than 2%. The statement was viewed on Wall Street as a response to last month's news that Pershing Square Capital bought a 4.9% stake in McDonald's with designs on pressuring the burger giant to monetize assets and return value to shareholders. Pershing, which recently employed similar tactics with great success at Wendy's ( WEN), reportedly favored a plan to spin off company-owned restaurants into a separate, publicly traded entity and then borrow against its untapped real estate, returning the money through dividends and buybacks. Pershing, run by prominent value investor Bill Ackman, scored a big win at Wendy's, one of McDonald's chief competitors. After months of browbeating during which Pershing scooped up a 9% stake in the company, Wendy's agreed to sell part of its Tim Hortons doughnut chain and authorized a $1 billion share buyback, sending its stock up 12% in one day to an all-time high. Its subsequent move into shares of McDonald's looked like an attempt to replicate that success. But McDonald's Chief Executive Jim Skinner's letter to franchisees Monday rebuffed the idea of a spinoff or a real estate investment trust. "Neither would be in the best interests of our system or our shareholders," said Skinner. Instead, he indicated, the company would stick with its "Plan to Win," which focuses on improving customers' experiences at McDonald's and enhancing collaboration among owner-operators, suppliers and the company. "Our greatest strength is, and always will be, our system -- our three-legged stool," Skinner said, referring to its franchising business, its restaurant business and its real estate business. "It is a competitive advantage no one can match. And, when we work together, we succeed."
Pershing's Ackman could not be reached immediately for comment. Morningstar analyst Carl Sibilski said he was encouraged to see that McDonald's appears to be sticking with its current capital structure. "
Pershing's plan would bust apart McDonald's system and pull apart some of the operational glue that holds it all together for a one-time benefit and some short-term tax advantages," Sibilski said.