Manitowoc Shares Jump As Relational Investors Seeks Spin-Off

(RTTNews) - Shares of crane and food-service equipment maker Manitowoc Co (MTW) jumped about 12 percent in after-hours trade on Thursday after activist shareholder and investment firm Relational Investors disclosed in a regulatory filing that it wants the company to spin off its food-service business from its crane business.

Relational, founded by Ralph Whitworth and David Batchelder, has acquired an 8.5 percent stake in Wisconsin-based Manitowoc. The fund wants the company to spin off its food-service business from its industrial business, as well as take measures to improve margins.

Relational believes that the market significantly undervalues Manitowoc due to its combination of the two businesses and that a spin-off of the food business from the crane business would optimize capital allocation and maximize shareholder value.

In January 2014, Relational met with Manitowoc's management to recommend that the company hire advisors to effectuate a spin-off, but to date, the board has declined to request for a meeting, the filing shows.

In May, Manitowoc posted a net loss of $8.8 million for the first quarter, compared with a profit of $10.4 million last year. Sales slid 5 percent to $850 million, due to a 14 percent decline in crane and related products segment. Sales at food-service equipment segment, which makes ice makers and freezers, grew 9.3 percent.

Manitowoc stock closed Thursday at $29.71, up $0.41 or 1.40%, on a volume of 1.7 million shares on the NYSE. In after hours, the stock surged $3.41 or 11.48% at $33.12.