Reuters says that the company is conducting a strategic review which may result in spinning off pieces of the conglomerate. The sources also told Reuters that Relational Investors had examined taking an activist position advocating a breakup, but could not say whether the firm had purchased any shares. Textron has not yet hired a banker, the reports say. The company has fallen by 70% in the last 4 years, but is up 7% today on news of this potential spin off.
Barron’s quotes Jeff Sprague of Vertical Partners who throws cold water on the speculation, at least in the near term:
“We would expect that TXT (like any company) would routinely do strategic reviews, but we don’t see TXT as a near term break-up candidate as a relatively new CEO, Scott Donnelly, focuses on operationally improving its core businesses. The report does say that nothing is imminent and TXT has not hired bankers. However, in many respects TXT is the most obvious remaining candidate in our group for some type of break-up, eventually, given that it is more of a holding company with distinct unrelated businesses with their own brands and channel identities.”
Disclosure: Author owns no shares of any stock mentioned
