Some more spinoff news from the current earnings season. Dean Foods (DF) reported disappointing Q4 numbers, but buried within the press release were plans for its ~86% stake in the WhiteWave Foods Company (WWAV). Dean plans on spinning off a chunk of those shares to shareholders in a tax free transaction after its lockup period expires, likely at the end of May. Interestingly, the company revealed that it still intends to hang on to ~20% of the shares which it may release another time. I wonder if it has anything to do with the fact that after unloading its Morningstar business, Dean’s main operations, Fresh Dairy Direct, are mostly exposed to milk, which it readily admits is witnessing declining volumes year over year. Calculating its stake and share of WWAV’s market cap, WhiteWave accounts for the majority of its share price.
In case you don’t remember, WWAV was once a fully owned subsidiary of Dean, until the parent decided to offer about 14% of the shares in an IPO at the end of October. WWAV was highly anticipated, pricing above range at $17, mainly because it is focused on the faster growing soy and organic segments. Unfortunately, the company’s shares haven’t done much since then and after its own disappointing earnings session, the shares remain below its IPO price.
We will keep you updated as this progresses and for all of our coverage of the Dean/WhiteWave transaction click here.
Disclosure: Author holds no position in any stock mentioned.
- Dean Foods Slides on Weaker Forecast (247wallst.com)
- Poor Outlook Pushes Dean Foods Down 9% (blogs.barrons.com)