Pershing Square Poised To Profit From Beam Sale

Jan 14 2014 | 11:53am ET

When Pershing Square Capital Management has been in the news lately, it's mostly been bad: huge losses and humiliating setbacks in major investments, such as J.C. Penney Co. and Herbalife. But the New York-based hedge fund has actually been riding a winning streak lately.

Despite roughly $1 billion in losses on Penney's and Herbalife, Pershing Square's other investments soared at the end of last year, leaving it up over 10% through November. Now, it's poised to make $342.5 million on yesterday's deal between distillers Suntory Holdings and Beam Inc.

Pershing Square owns 12.8% of Beam, which makes Jim Beam and Maker's Mark bourbon, Laphroaig Scotch, Courvoisier cognac and Cruzan rum, among other spirits. Suntory's $16 billion offer for Beam sent the latter's shares up 25%—and could earn Pershing Square even more if it sparks a bidding war.

And Pershing Square's William Ackman isn't just a prescient investor who saw value in Beam shares—his efforts helped create the company. Beam is what remains of Fortune Brands, whose breakup Ackman championed. Indeed, Pershing Square has already done well from the sale of Fortune's golf business and the spin-off of its home products business. The firm's share in Beam is currently worth about $1.7 billion; it paid only $765 million for its Fortune stake in 2010.


In Depth

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note