Icahn buys stake in Manitowoc and calls for split-up

Shares of Manitowoc (MTW) jumped nearly 9% Monday after investor Carl Icahn bought a 7.77% stake to convince the company's management to split its crane manufacturing business from its food service division.

Icahn hasn't had discussions with Manitowoc's management but may seek representation on its board, he wrote in a filing with the Securities and Exchange Commission.

Manitowoc couldn't be reached for comment.

Icahn's move follows a similar intervention by Relational Investors, co-founded by Ralph Whitworth and David Batchelder, who bought a 8.5% stake in July and called for spinning off its food service unit.

"These two businesses differ materially in their operating metrics and cyclical characteristics, which we're convinced causes a perpetual discount in the share price," Relational said in July.

The Manitowoc, Wisc.-based company's shares ended Monday $1.87 higher to $22.79.

Manitowoc's shares have fallen about 2.3% in 2014 as its crane business continues to suffer from sluggish demand in the rough-terrain truck and boom-truck markets, particularly in North America and Latin America. Third-quarter sales in the crane unit – the larger of Manitowoc's two main business units -- fell 6.7% from a year ago to $569.2 million.

Third-quarter revenue for the food service unit, which makes ice machines and refrigeration equipment, rose 3.8% from a year ago to $417.1 million.

Manitowoc was founded as a shipbuilder in 1902, but diversified into the crane business in the mid-1920's and entered commercial refrigeration shortly after World War II.

To battle back against cyclical fluctuations in construction, Manitowoc paid $2.7 billion in 2008 to buy U.K.-based Enodis PLC, an industrial kitchen equipment supplier whose customers include some of the largest restaurant chains, including McDonald's.

Icahn, one of the biggest corporate agitators on Wall Street, has been active this year in calling for moves that he believes will drive stock prices higher. Earlier this year, he called for eBay to spin off its PayPal unit, only to be met by resistance from eBay's management. In September, eBay relented and agreed to spin off the online payment service.

Icahn has also repeatedly called for Apple to use more of its cash reserves to buy back shares. In October, Apple CEO Tim Cook said Apple had spent $17 billion on stock buybacks in the September quarter and $45 billion total in the previous 12 months.