Looking across the pond, industrial group Cookson (LSE:CKSN) announced that it has hired an investment bank to examine the possibility of spinning off its electronics division. The unit, which is now known as ‘Performance Materials’, makes components for gadgets such as the iPad and according to some analysts has “few, if any” synergies with the company’s larger ceramics business. The company also has a small precious metals recycling business. In FY 2011, the electronic component business comprised ~18% of the company’s net sales and ~33% of its trading profit.
While rumors of a spin have long swirled around the company, the speculation really heated up after activist investor Cevian recently took an 18% stake in the company. Analysts seem to like the move as a catalyst to unlock value and break up the conglomerate discount. Supposedly, CEO Nick Salmon is receptive to the idea of a split although I am not sure what the source of that info is. Although the share price is still lagging its peers, the name is up big year to date and it even popped a bit on the day of the announcement.
For some additional information on the company, check out its most recent annual report where it surprised with 11+% profit growth. While there is an OTC vehicle to trade here, it appears extremely thinly traded and of course, one must keep in mind the foreign exchange risk when purchasing a foreign denominated company.
Disclosure: Author holds no position in any stock mentioned.