Marcato Urges Dillards to Spin Off Real Estate Into REIT

Mick McGuire, a quiet activist and Pershing Square alumni, has taken a 4.9% stake in Dillard's through his fund, Marcato Capital. He proposes splitting Dillard's into two companies to unlock value, suggesting a department store and a real estate investment trust. This strategy, known as constructive activism, aims to increase the stock value by 75%. The market has reacted positively, with the stock rising. Unlike aggressive activists, McGuire is not seeking a board seat but is urging Dillard's management to consider his proposal.

Who is Mick McGuire and what is his connection to Dillard's?

• A real estate investor unrelated to Dillard's

• A competitor of Dillard's

• A new CEO of Dillard's

• A quiet activist with a stake in Dillard's

What is the proposed strategy for Dillard's to unlock value?

• Merge with another department store

• Spin off its real estate business

• Close down underperforming stores

• Increase marketing budget

What is the expected increase in value if Dillard's follows the proposed strategy?

• 50%

• 75%

• 100%

• 25%

How does Mick McGuire's activism style differ from more aggressive activists?

• He seeks to replace the CEO

• He writes public letters criticizing management

• He proposes constructive strategies without seeking board seats

• He launches hostile takeovers

What is the main uncertainty regarding McGuire's proposal to Dillard's?

• If the real estate market will improve

• If McGuire will increase his stake

• Whether Dillard's management will act on the proposal

• Whether the stock price will increase