Corporate Spinoff Monthly Roundup – March 2019

Another month is almost in the books so lets recap the recent spinoff activity and also take a look at what spinoffs the next month will bring:

Spinoffs Completed Prior Month

It’s worth noting that in February’s roundup, this section had nothing listed. Ooops? It was actually quite a busy month so keep checking our site as we are always updating it with new information – some that is new to market and others that we unfortunately might have missed.

  1. March 1st – FMC Corporation (FMC) distributed its remaining stake in lithium pure play Livent Corporation (LTHM). FMC shareholders should have received 0.935301 LTHM shares for every FMC share owned. The spinoff was the finishing touch of a two-step process that began with Livent’s IPO back in October 2018. Investors looking for a way to play the lithium market finally have a focused company to bet on invest in.
  2. March 4th – Naspers (NPSNY) is South Africa’s largest company in terms of market value due to its holdings in Chinese behemoth Tencent (TCEHY). The company spun off its pay TV business, MultiChoice Group (MCHOY) in an effort to both highlight the value of its non-Tencent assets and to narrow its discount to intrinsic value. It’s good to see management making these types of moves!
  3. March 8th – Eli Lilly (LLY) completed the exchange offer for its remaining stake in Elanco Animal Health (ELAN). This deal is similar to Pfizer’s Zoetis transaction from several years ago in that first Lilly IPO’d a small stake and months later followed up with an exchange offer. As usual, the offer was oversubscribed, so shareholders that tendered share were prorated.
  4. March 19th – after several long years, Disney (DIS) finally completed its purchase of 21st Century Fox. For anti-trust reasons, just prior to the deal closing 21st Century Fox spun off many of its cable news and other TV stations into an independent company, the Fox Corporation (FOX).
  5. March 29th – Capital Product Partners (CPLP) will spin off its crude and product tanker business and subsequently merge it with DSS Holdings. The newly combined entity will be known as Diamond S Shipping Inc and trade under the ticker ‘DSSI’. CPLP unit holders will first receive 1 DSSI unit for every 10.19 CPLP units owned and then post merger, CPLP shareholders are expected to effectively own 33% of the new company.

Spinoffs Set For Coming Month

April is going to be a busy month as well and is set to kick off with a bang!

  1. April 1st – after several years of merger integration work, DowDupont (DWDP) will begin breaking itself up this month. First up is the spin off of its material science business, the new Dow Corporation (DOW). The new company will join both the Dow Jones index and the S&P 500 index. DowDupont’s next and final spinoff, Corterva Bioscience, is scheduled for June.
  2. April 1st – Ironwood Pharmaceuticals (IRWD) will spin off its R&D business Cyclerion Therapeutics. The new company will trade under the ticker CYCN and shareholder will receive 1 share of the new company for every 10 IRWD shares owned. Cyclerion expects to have enough cash to fund about two years of development and the parent company now expects to be profitable going forward. Win/win?
  3. April 1st – in this edition of ‘Shady Spin Of The Month’, mCig will distribute shares of ObitX. A cannabis company spinning off a blockchain and crypto business…need we say more?
  4. April 4th – AP Moller Maersk (AMKBY) is slowly turning itself into a pure play transportation company. As part of that initiative, the company will spin off its drilling business, The Drilling Company of 1972. The Maersk family still retains a hefty stake in the company and has agreed to an ~1 year lockup on its shares.
  5. April 9th – Novartis (NVS) will shed a tear as it says goodbye to Alcon, its eye care business. Novartis’ takeover of Alcon will not be remembered so fondly, but perhaps as a newly independent company, Alcon can chart a better course for itself. Shareholders will receive 1 ALC share for every 5 NVS shares owned.

Please check out our ‘Upcoming Spinoffs’ table for a more complete picture of what is to come and as always, please let us know if we missed anything!

Disclosure: Author is long shares of DIS.