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.

What is the significance of the 4.9% stake that Mick McGuire holds in Dillard's?

How does Mick McGuire's approach differ from more aggressive activist investors?