Honeywell Stock Hits All-Time High After Elliott Discloses More Than $5B Stake | Global News Avenue

Honeywell International (Medal of Honor) shares jumped to record high on Tuesday Elliot Investment Management said it had built a stake worth more than $5 billion in the industrial conglomerate and was seeking to spin off the company.

Elliott said in a statement that the company has written to Honeywell’s board of directors seeking to spin off the aerospace and automation businesses into independent companies.

The hedge fund said it believes the split of the two companies will lead to share price gains of 51% to 75% over the next two years as they benefit from more centralized management and a simplified structure.

“The conglomerate structure that once suited Honeywell is no longer appropriate and it is time to simplify,” Elliott said. He noted that “uneven execution, inconsistent financial results and underperformance of the stock price have weakened the company.” A strong record of value creation over the past five years. ”

Honeywell is one of the few U.S. conglomerates that has yet to be broken up

Honeywell is one of the few industrial groups that has yet to be spun off, although the company announced plans last month Simplify business and spin off its advanced materials division.

Other prominent industrial conglomerates also saw their share prices surge after spinoffs.

General Electric Company’s three way break up For example, after completion in April this year, the share prices of its independent companies rose sharply, including power generation business GE Vernova (GEV) inventories have more than doubled this year.

BloombergElliott’s holdings in Honeywell were earlier reported, with the newspaper saying the hedge fund’s stake was one of its largest single investments ever in a company. It also said Elliott is now one of Honeywell’s top five shareholders.

Honeywell, headquartered in Charlotte, North Carolina Quarterly sales posted last month fell short of expectations reduced income The company’s guidance was affected by falling demand for its industrial automation products.

Honeywell shares were up 4.6% on Tuesday morning, bringing their gains this year to more than 12%.