Pershing Square Capital Management on Wednesday said it had dropped its activist campaign against McDonald's Corp. and threw its support behind the growth plan the fast-food chain outlined Tuesday.
The hedge fund, which holds shares and options worth 4.9% of McDonald's, has in recent months pressed the world's largest restaurant chain to spin off a portion of its company-owned restaurant unit and invest more in developing markets.
Pershing founder Bill Ackman also had urged the company to sell a portion of its 8,000 or so company-owned restaurants to franchisees and increase financial reporting transparency.
McDonald's initially rejected Pershing's proposals, which came amid a spate of "activist" shareholder campaigns directed at other companies, including fast-food competitor Wendy's International Inc.
But Tuesday, McDonald's said it would take a number of measures that Ackman said he supported. The company stopped short of promising any spinoff of its McOpCo division, which operates the company-owned restaurants. Ackman previously said he was open to alternative company proposals.
"We think it is a great plan, and we're very supportive of the company and management and look forward to the execution of their program," Ackman said Wednesday.
Analysts credited Ackman with accelerating change at McDonald's. But one investor said it was good that he was ending the campaign before it devolved into acrimony.
"I'm glad to hear he's dropping it," said Janna Sampson, a portfolio manager with Lisle, Ill.-based OakBrook Investments. "Continued harassment of management would not have been good for keeping their focus on the business."
McDonald's stock fell 69 cents to $35.16.