Spinoff Odds & Ends: Baxter, Darden & Yahoo

A few short hits to kick off the week:

  1. Marketfolly posts a copy of Third Point Capital’s Q3 newsletter in which chief Dan Loeb talks about the firm’s position in Baxter International (BAX). Mr. Loeb is a big fan of new CEO Jose ‘Joe’ Almeida which shouldn’t come as much of a surprise given that the fund’s board representative helped select him. Basically, the expectation is that he can deliver value again after doing so in the past. Mr. Almeida was previously CEO at Covidien, which spun off its pharmaceuticals business, Mallinckrodt (MNK), prior to selling itself to Medtronic (MDT) in 2014. Of course, Mallinckrodt is now facing issues of its own.Interestingly, the other positive ‘inflection point’ highlighted in the letter is the recent spinoff of its biosciences business, Baxalta International (BXLT). Readers of this site should be very aware of the intriguing buyout situation going on there right now.
  2. Bloomberg BNA examines why Darden (DRI) was able to receive a private letter ruling from the IRS effectively blessing its recent REIT spinoff, Four Corners Property Trust (FCPT), after the agency had declined to provide one for Yahoo’s (YHOO) planned Alibaba (BABA) spinoff. Aside from the fact that they are quite different transactions (in size, business etc.), the truth is that no one outside of the braintrust in the IRS really knows the answer to this one. The end result is that Darden shareholders can breathe easy about the tax status of their spinoff whereas Yahoo shareholders will have to sweat it out.

Disclosure: Author holds no position in any stock mentioned.