Pershing Square Activist Presentation Deck
III. Pershing's Proposal to McDonald's:
McOpCo IPO
Based on relevant
publicly traded
comparable companies,
including several real
estate holding C-
Corporations, Pro Forma
McDonald's would trade
in the range of 12.5x-
13.5x EV/CY '06E
EBITDA. We believe PF
McDonald's would trade
at a 37%-52% premium
over where it trades
today.
(1)
Significant Value Creation for Shareholders
$ in millions
EV/06E EBITDA Multiple Range
Enterprise Value
Less: Net Debt (12/31/05E) (1)
Plus: Remaining Stake in McOpCo
Equity Value
Ending Shares Outstanding (12/31/05E)
Price Per Share
Premium to recent price
(2)
Implied P/FY 2006 EPS Multiple
Implied P/FY 2006 FCF Multiple (5)
Implied FCF / Dividend Yield
(3)
32
Low
12.5x
$55,799
14,650
2,097
$43,247
957.3
$45
36.9%
19.9x
19.8x
5.1%
High
13.5x
$60,263
14,650
Assumes $1.35 bn of net debt allocated to McOpCo and $5.0 bn of net debt allocated to PF McDonald's. In addition, assumes $9.7 bn of incremental leverage placed on
PF McDonald's.
2,493
$48,106
957.3
$50
52.3%
22.2x
21.9x
4.6%
(2) Represents 35% of the market equity value of McOpCo.
(3)
(4)
Assumes incremental leverage and the after-tax proceeds from McOpCo IPO (net of fees and expenses) are used to buy back approximately 316 mm shares at an average price of $40.
Assumes a recent stock price of $33.
(5)
P/FY '06E FCF multiple adjusted for Pro Forma McDonald's 35% stake in McOpCo.View entire presentation