NEW YORK (FORTUNE) - Activist hedge fund manager and McDonald's shareholder Bill Ackman laid out a proposal Tuesday that the fast-food chain restructure its operations and spin off a stake in its restaurants.

In a detailed presentation followed by an even more detailed Q&A session at the Value Investing Congress held in New York's Time Warner Center, Ackman, the managing partner of Pershing Square Capital Management, spelled out his belief that the constituent parts of McDonald's (Research) are worth more than the whole. (Check out www.valueinvestingcongress.com for Ackman's slides.)

The proposal followed weeks of rumblings on Wall Street that a shareholder was readying a campaign to break up McDonald's. Pershing Square holds an almost 5 percent stake in the company, which trades at a discount to other restaurant companies.

At the heart of Ackman's proposal is a plan that McDonald's spin off a 65 percent stake in the roughly 8,000 restaurants it owns -- a volatile low-margin business. That, Ackman says, would enable McDonald's to transform itself into a high-margin, stable cash-flow real- estate owner and franchisor.

Ackman claims that some 90 percent of the economic earnings McDonald's generates come from the land and franchising business; he says the real estate alone is worth more than McDonald's current market capitalization.

Pershing Square first presented its idea to McDonald's on Sept. 22, but the company rejected the proposal. Ackman says the company's management disagreed with him about how the market would value the franchisee/real-estate business. Ackman believes it would be worth no less than $45 to $50 a share. In his view, McDonald's is "not a restaurant company but a brand company, a real- estate company."

Ackman says management rejected his proposal on the grounds that a restructured McDonald's would be unlikely to create any additional value over its current $33 share price if it were accorded a stock price in line with other restaurant companies. In other words, why bother?

Citing a statement by McDonald's, Reuters reported Tuesday that McDonald's management and two outside advisers had considered Ackman's ideas before deciding they would pose strategic and financial risks to the company.

"The proposal is an exercise in financial engineering and does not take into account McDonald's unique business model," the company said in the statement. "While we remain open to ideas, we simply will not jeopardize the long-term health of our company, nor our relationships with customers, franchisees and suppliers for such a financial engineering exercise."

Pershing Square owns its 4.9 percent stake in McDonald's through options, meaning that the fund stands to make a lot of money if its view is right -- and lose its investment if it is wrong.

"Our intention is to change their intention," Ackman says.

The managing partner of Pershing Square vows he will not give up his campaign easily. "I'm the most persistent person you will ever meet," Ackman says. But if he is to succeed, other shareholders will have to agree with his analysis.

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