A second activist investor has expressed an interest in acquiring an unspecified number of shares of United Technologies Corp. stock, as UTC considers whether to split the company into three autonomous entities.
Third Point LLC, a New York-based hedge fund run by Daniel Loeb, has notified the U.S. Federal Trade Commission of his intention to begin acquiring UTC stock, only a month after William Ackman’s Pershing Square investment firm did the same. Both firms have a history of seeking changes in companies in which they invest.
Activist investors make a practice of acquiring large amounts of a targeted company’s stock, aiming to seat their own board members to effect policies that boost stock prices and profits, often through a sale or breakup of the company.
Bloomberg reported Tuesday that the investment by activist firms “raises the stakes” as UTC, based in Farmington, looks into a potential split into separate aerospace, elevator, and climate control businesses. UTC operates East Hartford-based Pratt & Whitney, Otis Elevator, Carrier Corp., and other business units under a single corporate banner.
UTC CEO Gregory Hayes in February told investment analysts that the board of directors is weighing whether the corporation is worth more as it is or as three individual companies. Hayes said the board will make a decision about a potential break-up by the end of this year, after UTC completes its pending $30 billion acquisition of Rockwell Collins Inc., based in Iowa.
UTC intends to merge Rockwell with its North Carolina-based UTC Aerospace Systems, or UTAS unit, Hayes has said, and will rename the combined businesses Collins Aerospace Systems. Rockwell makes flight controls, aircraft interiors, and related products, while UTAS makes jet engine controls, aircraft landing gear, brakes, and similar equipment.
Hayes expects the merger to occur sometime this summer. He told Bloomberg that the stock was undervalued and that “he was aware of rumors that United Technologies had been a target of activists.” The decision to consider a split “wasn’t driven by outside investors,” he told Bloomberg, but added, “he’s open to ideas” to boost the stock price.
“If an activist wants to come into the stock and they’ve got some ideas, we’ll listen,” he said in the report.
A UTC official declined to comment Tuesday.
