Investing.com -- Honeywell International Inc. saw its shares rise by 7% in early Tuesday trading following a report by Bloomberg that activist investor Elliott Investment Management has amassed a stake exceeding $5 billion in the company.
The investment marks Elliott's largest commitment to a single stock, solidifying its position as one of Honeywell (NASDAQ:HON)'s top five shareholders, according to Bloomberg.
Elliott is reportedly urging the industrial giant to consider a structural breakup, similar to strategies other large conglomerates like General Electric (NYSE:GE) have adopted, the report states.
Bloomberg noted that Honeywell, a Charlotte, North Carolina-based company, has shown comparatively modest growth in recent years. While Honeywell's stock has risen approximately 25% over the last five years, this lags behind the 76% gain for the S&P 500 Industrials Sector index.
Bloomberg said that despite Honeywell's historic valuation premium, its performance has stagnated relative to competitors.
Elliott's reported push for a breakup comes as Honeywell has already announced plans to spin off its advanced materials division, aiming to streamline its operations.
Honeywell's business units span sectors including aerospace, energy, and industrial automation, but the mixed performance across these areas has led to pressure from investors.
Bloomberg also highlighted previous attempts by activist investors, including Dan Loeb's Third Point LLC, to prompt Honeywell to divest certain divisions like aerospace.
Former CEO Darius Adamczyk, however, opted to spin off Honeywell's thermostat division, Resideo Technologies (NYSE:REZI), as well as its turbocharger business, Garrett Motion (NASDAQ:GTX).
Elliott's recent campaigns have targeted larger firms, Bloomberg reported, citing Elliott's previous stakes in AT&T (NYSE:T) and SoftBank (TYO:9984) as comparably smaller than the Honeywell position.