Shares jump $8.82 after two mainland partners purchase a 9.9 percent stake
POSTED: 1:30 a.m. HST, Apr 2, 2011
Shares of Alexander & Baldwin stock soared 19 percent yesterday to close up $8.82 at $54.47 following Thursday's announcement that a New York hedge fund manager and a partner bought up shares to become A&B's largest owner.
The closing price was the highest since Aug. 10, 2007, when A&B's stock closed at $55 on the New York Stock Exchange.
Bloomberg News reported that Wells Fargo Securities, which downgraded A&B's stock last week, raised its expectations for the stock and estimated A&B's "break up" value — that is splitting apart core divisions of ocean cargo transportation, commercial real estate and agribusiness potentially to be sold — at about $54 a share.
Stock analysts and some company insiders anticipate that the hedge fund manager, Bill Ackman of Pershing Square Capital Management LP, will seek to break up A&B.
Ackman's firm, along with former Pershing Square partner Richard McGuire of San Francisco-based Marcato Capital Management LLC, disclosed Thursday after the stock market closed that they recently bought $168 million of A&B's stock to give them a 9.9 percent stake.
Ackman and McGuire paid an average of $41.04 for their shares, making their stake worth about $224 million at yesterday's closing price, or $56 million more than the average paid.