A few links to close out a busy month: The WSJ notes that since the spinoff of PayPal (PYPL), EBay’s (EBAY) post-earnings stock price volatility has increased dramatically. Prior to last week’s announcement, the name had moved double digit percentages in four of the previous five announcements – that is some serious movement. As possible reasons, the article… Read More »
After a bit of a delay and 17 years after it was spun off from Varian Associates, Varian Medical Systems (VAR) finally completed the spinoff of its imaging component business, Varex Imaging (VREX). Shareholders yesterday should have received 0.4 VREX shares for every one VAR share owned, so one needed to have owned at least 3 VAR shares in order… Read More »
NeuStar (NSR) agreed to be acquired by a group led by private equity firm Golden Gate Capital in a deal valued at about $2.9b. The deal was announced in mid-December and the $33.50 offer price represented a nice premium. Of course, the sale also means that Neustar’s previously announced Order Management and Numbering Services spinoff is off the table.… Read More »
Toshiba Corp. (TOSYY) has today outlined more details of the plan to sell off part of its memory chip business, in an effort to raise funds ahead of a multi-billion dollar write down of its US nuclear business. CEO Satoshi Tsunakawa said at a news conference on Friday: “We had been thinking of splitting off semiconductors to beef… Read More »
Citrix Systems(CTXS) is finally letting go of GetGo. The company first announced plans for the spinoff of its GetGo division in November 2015. Last July, an agreement was reached with LogMeIn(LOGM) to merge with GetGo immediately post spin off in a Reverse Morris Trust transaction. Citrix announced that shareholders of record on January 20 will receive approximately .1718… Read More »
What is a Reverse Morris Trust? You may have heard the terms Reverse Morris Trust or Morris Trust used in regards to a spinoff transaction. These terms describe two related types of transactions in which a company is able to sell assets without triggering a tax liability for either the company or shareholders. Naturally, this can be quite… Read More »
Swiss pharmaceutical giant Novartis (NVS) is considering a spin off Alcon, its surgical equipment and contact lens business. While most of its peers are busy acquiring each other, Novartis is taking a more inward-focused approach also announcing today a $5 billion share buyback. Reporting its 2016 earnings, Novartis said: “Novartis is considering options for the Alcon Division. The… Read More »
As we near the end of the month, the completion of three spinoff transactions will be driving changes in various S&P Indexes. Citrix Systems(CTXS) will be spinning off its GetGo division which will then merge with LogMeIn(LOGM) in a reverse Morris Trust transaction. After the transaction is completed on January 31st, Citrix will remain in the S&P 500.… Read More »
Burdened by debt since its private equity buyout a decade ago, Avaya has filed for Chapter 11 bankruptcy. The telecommunications software and hardware company posted a loss of $750 million for its most recent fiscal year. It is burdened by $6.3 billion in debt and $400 million in annual interest expense. “Avaya’s current capital structure is over 10… Read More »
In late 2015, Sergio Marchionne led the successful IPO and spinoff of Fiat Chrysler’s(FCAU) Ferrari(RACE) division. Now various speculations suggest that he may spin off Maserati, Jeep, or the Parts division. Marchionne, who is set to retire in 2019, has tried to lure a buyer, publicly courting General Motors(GM), even, but has not found a partner. Alternatively, some believe… Read More »
Speculating about spinoffs – it’s not just for us, John Malone and deadline-driven journalists: 1) The Motley Fool handicaps the odds of a Johnson & Johnson (JNJ) spinoff in 2017. The basic premise is that JNJ has multiple segments with diverging sales trends (at least recently) so why not set one free. After playing through a few scenarios, the author ultimately suggests… Read More »
Toshiba Corp. (TOSYY) has today acknowledged that recent speculation about a potential sale of its flash memory business was bang on the money. The Nikkei newspaper reported earlier this week that the Japanese conglomerate may sell a 20 percent stake in the chip operations, raising as much as 300 billion yen ($2.7 billion). Memory is Toshiba’s most profitable… Read More »
E.ON(EONGY), German’s largest utility, is facing calls from activist investor Knight Vinke to spin out its power distribution business. This comes just months after the €4 billion demerger of its conventional power generation and commodity trading units into Uniper(UN01.DE). Knight Vinke, a European activist fund best known for its campaigns against UBS and Darty, was supportive of the… Read More »
Late last year Varian Medical Systems (VAR) pushed back the timing of its Varex Imaging spinoff to January 2017. Now the company’s board of directors is sticking with that target by officially approving the separation of the imaging business and setting January 28th as the distribution date. Varian shareholders as of January 20th should receive 0.4 shares of Varex for every 1… Read More »
Atlas Copco(ATCO-A.ST), the largest industrial corporation in Sweden by market value, today announced an intention to split into two listed companies, separating its industrial and mining operations. The Company intends to put the proposal to shareholders at its 2018 Annual General Meeting(AGM). From this morning’s press release: “NewCo will focus on mining/civil engineering customers and include the existing… Read More »