The Spinoff Roundup

A brief summary of spinoff news with a dash of the rumor mill mixed in – enjoy the first Spinoff Roundup. Readers – what is the interest level (if any) in non-US traded spinoffs?

1. Newscorp (NWS) announced plans to spin off Sky News in order to gain government approval for its takeover of British Sky Broadcasting. The spin is necessitated by fears of News Corp controlling too much of the British media and some are still concerned that it does not fully address the issue. The move cleared one significant hurdle as it satisfied UK culture secretary Jeremy Hunt who cleared the deal. Here is Dealbook’s take on the move which mentions that the deal is facing resistance from Ofcom, British communications regulator, due to the ‘prospect of a British version of Fox News’. The horror! Details of the spin have yet to be released.
2. French retailer Carrefour (CRERY) announced plans to spin off Dia, its Spanish discount chain. Additionally, the company plans a second spin unloading 25% of its European property assets. According to the company, the moves will allow for a greater focus on the Carrefour brand while allowing shareholders to benefit from the spins. Analysts are skeptical that the spinoffs will add value, calling them ‘cosmetic moves’  and the stock has traded down since the announcement. The moves are expected to be done via extraordinary dividends and Dia will be listed in Madrid while Carrefour Property will be listed in Paris. Shareholder votes will take place in June, on the 21st for Dia and the 23rd for Carrefour Property.
3. Bloomberg reported that Siemens (SI) was planning on unloading its Osram lighting business within the next few months. Osram is the second largest lighting company in the world (behind Philips) and is a big player in the burgeoning LED market. If completed, it will be CEO Peter Loescher’s latest mark on the European engineering behemoth which has been restructured quite a bit since Mr. Loescher took over. If completed, the move is expected to be done via IPO.
4. The New York Post, yes the New York Post, reported that Lionsgate Entertainment (LGF) is considering spinning off its digital assets including the male-focused Break Media. Lionsgate has been in the news a lot over the past year due to the involvement of activist investor Carl Icahn and the MGM bankruptcy. The spin would also include the company’s share in pay-TV service EPIX, TV Guide and FearNet. According to The Post, these businesses account for only approximately 15-20% of Lionsgate’s sales, but due to the frenzy for digital assets, the new company could command a valuation of $800m, a number roughly equivalent to the entire company’s market cap. Talk about the sum of the parts being greater than the whole! That number seems a bit optimistic to me, but if true, I am sure Lionsgate will seriously consider this option.
5. Advantage Oil & Gas (AAV) announced it will create an oil-focused subsidiary, Longview Oil Corp.  The move is expected to be done via IPO this April. I hope to write a little more about this shortly.
6. Cablevision (CVC) announced that upcoming spinoff Rainbow Media Holdings LLC will be renamed AMC networks after its most popular network. The new AMC Networks will also include WE TV, IFC, the Sundance Channel, IFC Entertainment, an independent film business, and Rainbow Network Communications, but bear in mind that the new company will still be controlled by the Dolans, the same family that thinks Isaiah Thomas is a top-notch NBA executive.  To be fair, the family has recently pursued several shareholder-friendly moves in order to unlock value (and profit themselves) including last year’s spinoff of MSG. The Rainbow Media spin is expected to be completed in the middle of this year via tax free distribution.

As always, we will keep you updated as more information is released.

Disclosure: Author holds no position in any stock mentioned.