FedEx stock rises on speculation of $1B investment
FedEx Corp., the biggest air cargo airline, rose the most in nine months on speculation that it may be an investment target for William Ackman's Pershing Square Capital Management LP.
The stock increased 4.4 percent at the close in New York trading for the largest gain since Oct. 10.
Attention focused on FedEx when Ackman outlined in a letter to investors his intention to buy a stake of as much as $1 billion in a large-capitalization, investment-grade U.S. company he didn't identify. FedEx, with a market value of about $33 billion, is in the midst of a cost-cutting restructuring at FedEx Express, its largest unit.
Ackman declined to comment in an e-mail. Jess Bunn, a spokesman for Memphis-based FedEx, also declined to comment.
“The business is simple, predictable, and free-cash-flow-generative, and enjoys high barriers to entry, high customer switching costs and substantial pricing power,” Ackman told investors.