A&B stock surges 19% after talk of breakup

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.