Pershing Square Activist Presentation Deck
O
A Revised Proposal for Creating Value
at McDonald's
($ in millions)
We believe a minority IPO of McOpCo would force a market revaluation of McDonald's.
Segment
McOpCo
Brand McDonald's
Total
Note:
(1)
As Reported
2006E
EBITDA
$2,503
3,090
$5,594
Revised Proposal: Allows Investors to
Value on a Sum-of-the-Parts Basis
Adjusting for a Market
Rent and Franchise Fee
2006E EV/'06E EBITDA Enterprise
EBITDA Multiple
Value
$1,130
4,464
5,594
Recent Stock Price
7.0x
9.3x
8.9x
Implied multiple,
based on a $34
stock price
$7,908
41,675
$49,582
$34.00
IPO of 20% of McOpCo
and Transparency Drives Revaluation
EV/'06E EBITDA
Enterprise
Multiple
Value
Low
Final Revised Proposal.ppt
High
7.0x
7.0x
12.5x 13.5x
Implied Share Price
Premium to Unaffected Price
(1)
Low
High
$7,908
$7,908
55,799
60,263
$63,707 $68,171
$46
45%
$50
57%
Assumes $1.25bn of proceeds from IPO and $1.75bn of existing cash on hand used to repurchase shares. Capital structure assumptions are detailed on page 56 of the Appendix.
Analysis is pro forma for a McOpCo spin-off and McDonald's share buyback on 12/31/05.
Based on 10/31 closing price of $31.60.
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