May 21, 2024 06:23 GMT
Johnson Controls (JCI Baa2/BBB+/NR): Another Activist
CAPITAL GOODS
• Following news of Elliott’s $1bn+ stake yesterday, Bloomberg reports Soroban has taken a $500mn+ position.
• JCI is already in the process of selling HVAC assets and is reportedly considering disposing of ADT alarms also.
• JCI equity has lagged peers, and these funds will likely push to unlock equity value through asset sales and management changes.
• We have expected asset sale proceeds to be returned to shareholders. While we don’t see credit impact for now, this raises uncertainty.
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