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Morningstar Analyst On McDonald's: Activist Investor Could Push For Management Change, Franchise Increase

Julia Emerson

After a rumor about Pershing Square Capital Management CEO Bill Ackman seeking a REIT spinoff for McDonald’s Corporation (NYSE: MCD), Morningstar Analyst RJ Hottovy told Benzinga that there are other things an activist investor could push for.

A change in management was his first suggestion. Specifically, bringing in “some new blood” from outside of the company.

Hottovy explained that a lot of the McDonald’s management is homegrown, as in managers have come up through the system.

“While that keeps you true to McDonald’s core values, it can make you a little slow to react to what’s going on in the industry,” he said.

Another path that activist investors could push for would be similar to what 3G Capital did with Burger King Worldwide Inc (NYSE: BKW), Hottovy suggested.

“Instead of a real estate transaction, you could see more franchising,” he said.

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