Marsh & McLennan Companies, Inc. (NYSE:MMC) shares rallied over two points today after a Toronto investment firm controlling around 1.1 million shares urged the company to spin off two of its business units. K.J. Harrison & Partners said the insurance broker's performance had "deteriorated financially and operationally" and that its strategy was flawed.

"In our view, holding companies are effective only when they demonstrated that they can add value through excellence in capital allocation and management selection and retention," said K.J. Harris CEO Jim Harrison. "Marsh & McLennan is currently doing neither. Consequently, the share price trades 40% below our estimate of the underlying enterprises and these enterprises are each at a disadvantage to competitors."

K.J. Harrison demanded that the company put a proposal for such a split off in the proxy for the company's next annual meeting. It is likely, given this analysis, that other shareholders will jump on board. Similar actions taken on other holding companies have resulted in significant value being unlocked for shareholders. Combined, these factors make MMC a stock worth watching!

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