McDonald's Corp shares fell on Friday, after analysts threw a wet towel on speculation that the hamburger maker could be the focus of a real-estate play.
Shares of the Dow component fell 4.2 percent, wiping out much of Thursday's 6.1 percent gain. The stock dropped US$1.44 to finish at US$33.25 on the New York Stock Exchange. Volume was heavy.
On Thursday, the stock finished another heavy-volume session at a 54-month peak of US$34.69.
Trading was spirited on Thursday amid speculation that a real-estate investor was eyeing the world's largest fast-food chain's vast property holdings. The name mentioned most was Vornado Realty Trust, which earlier this month sold 9 million shares in a public offering at an average price of US$86.75 each.
Vornado shares finished unchanged at US$84.90 on Friday.
McDonald's spokeswoman Lisa Howard said the company wouldn't comment on rumors.
Vornado officials couldn't immediately be reached for comment.
McDonald's is one of the world's largest property holders because it owns and leases to franchisees most of the real estate for its restaurants. Franchisees pay 9 percent to 10 percent of their restaurant sales as rent to McDonald's, besides paying royalty fees.
What continually piques interest in the portfolio is that the maker of the Big Mac and Happy Meals has imposing sites on many of the US' busiest intersections, boulevards and highways. In downtown Chicago, for example, the supersized McDonald's flagship sits on a full city block that is bordered by the two most traveled streets in and out of downtown.
However, the Oak Brook, Illinois, company has steadfastly refused to consider selling its real-estate portfolio or even folding it into a real-estate investment trust.
McDonald's annually reviews its real-estate holdings and regularly fields analyst and investor calls to unlock the value of the vast holdings.
The properties, which the company has been accumulating since its inception in 1955, are valued at purchase price, not market price. Most of them are held in a separate company called System Capital Corp.
On a conference call earlier this year, chief financial officer Matthew Paull reminded analysts that the company was not interested in making any changes to its real-estate policy.
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