Pershing Square Capital Management LP CEO and activist investor William Ackman revealed that his company holds 15.2 million shares in Starbucks Corp., the hedge fund said Oct. 9.
Pershing purchased the shares in Starbucks at an average of $51 per share, according to a presentation by Ackman at the Grant's Fall 2018 Conference in New York. The presentation highlighted Starbucks' long runway for single-digit unit growth, a track record of consistent growth in same-store sales and transactions, a strong focus on the core business and share buybacks of about $14 billion over the next 2 years.
The holding represents about 1.1% stake in the global coffee chain, according to S&P Global Market Intelligence.
"We view the active, engaged dialogue that we have with shareholders as critical input into our strategic approach and we value constructive feedback on delivering long-term shareholder value. We look forward to maintaining a productive dialogue with Mr. Ackman as we do with all of our shareholders," Starbucks said in a statement to S&P Global Market Intelligence.
Ackman revealed a new investment — without naming Starbucks — to investors and analysts during an Aug. 15 conference call. At the time, he said the investment is about 10% of the firm's portfolio.
In the restaurant space, Pershing also holds a stake in Burger King and Popeye's parent Restaurant Brands International Inc. about $1.23 billion and another in Chipotle Mexican Grill Inc. worth about $925.3 million, according to S&P Global Market Intelligence. The firm also holds about $694.5 million in snack and beverage maker Mondelez International Inc.
Pershing holds about $6.14 billion in equity assets, according to S&P Global Market Intelligence.
Starbucks shares rose by about 2.2% in afternoon trading Oct. 9 to $57.78. The stock is up about 8.1% since Aug. 31.
Pershing and Ackman have drawn headlines over the last year, including a report in April of investors leaving the Pershing fund after losses on Bausch Health Cos. Inc., formerly Valeant Pharmaceuticals International Inc., and Herbalife. Ackman and Pershing also lost a proxy fight in 2017 with Automatic Data Processing Inc.
The firm in June laid off three executives and fired 10 others in January after three straight years of losses.