Illinois Tool Works gains on shareholder pact

SAN FRANCISCO (MarketWatch) -- Illinois Tool Works shares rose 4% to $51.31 early Tuesday, making the stock one of top gainers on the S&P 500 . The move followed ITW's decision to give shareholder Relational Investors LLC the option to appoint one its principals, David Batchelder, to the board of the diversified industrial company. ITW, which makes everything from building materials to commercial kitchen equipment, has been facing pressure to break up its businesses. As part of the deal, Relational Investors, known for its shareholder activism, will refrain from launching a proxy contest to gain board seats and initiate or encourage any stockholder proposals. Relational owns 2.1% of ITW's common stock. "ITW and Relational have engaged in a series of productive discussions about our business and growth prospects," ITW Chairman and CEO David Speer said in a statement Friday afternoon. ITW shares are down 8% over the last 12 months.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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