Pressure on the cockpit
An activist investor is forcing aerospace giant United Technologies to play defense, sources tell The Post — and insiders suspect it’s Dan Loeb.
The activist, likely a hedge fund, has been quietly buying up shares of the defense contractor — pressuring it to spin off non-core businesses, according to sources.
That pressure, in turn, has been making Chief Executive Gregory Hayes uncomfortable and could be part of the reason he is trying to buy rival contractor Rockwell Collins for roughly $30 billion, sources speculated.
“I know there is a lot of pressure on United Technologies,” a banker close to the situation told The Post. UT declined to comment. Insiders at the $93 billion company believe the activist is Loeb’s Third Point.
Third Point referred ques- tions about the Farmington, Conn., company to a publicist who declined to comment.
Hayes has been complaining privately about activist shareholders, said one source, who likewise reported chatter that Loeb’s firm is involved in the situation.
UT earlier this month approached Rockwell Collins about acquiring the company, Bloomberg reported on Aug. 5.
Rockwell makes electronic equipment for aircraft. The two sides are believed to still be in talks, a source said.
A deal may not be reached, sources cautioned.
Meanwhile, some analysts and activists argue that UT would be worth at least 10 percent more if broken into pieces. They suggest in particular that its Otis unit, which makes elevators and escalators, is ripe for a spinoff.
In an Aug. 7 analyst report, JPMorgan said the Otis division deserves to be trading at a higher valuation than the company’s aerospace assets.
Hayes’ overture to Rockwell Collins could be a ploy to change the spinoff narrative, insiders added.
JPMorgan, in its report, said the timing of the UT-Rockwell talks is “somewhat surprising,” noting that UT is grappling with a big investment in a new Pratt & Whitney jet engine.