In stark contrast to the American people’s growing heft, American conglomerates appear to be on a steady diet, often slimming down via spinoffs. Break up expert and Swiss-conglomerate Tyco International (TYC) is the latest fad follower as the company announced plans to split itself into three separate companies. The new businesses will be: ADT North America (residential security):… Read More »
In what appears to be another ‘win’ for activist investors, defense contractor L-3 Communications (LLL) announced that it will spin out its government services business in the first half of 2012. The company faced pressure from Ralph Whitworth’s Relational Investors (who are also involved in the ITT [ITT] situation) to jettison non-core business units in order to improve… Read More »
The old rumor mill got another one right. AMR Corporation (AMR), American Airline’s (‘AA’) parent company, recently announced its intention to move ahead with a spinoff of American Eagle, its short-haul regional carrier. Eagle, the US’s third largest regional airline (at least based on aircraft operated – it’s fourth in fare-paying passengers), generates revenues from operating flights and… Read More »
Amidst the current carnage, it feels a bit disingenuous singling out one or two individual stocks for poor performance, but some spin-offs have taken quite a beating recently. Just prior to the increase in market ‘volatility’, nursing home operator and health care REIT stocks nose-dived because the CMS announced a harsher than expected (11.1%) cut in Medicare reimbursement… Read More »
Activist investors appear to be back and are once again using their clout to influence corporate decision making. Occasionally, this can lead to a spinoff such as the case with Bill Ackman’s Pershing Square and Fortune Brands (FO) or Carl Icahn and Motorola. Of course, not every company is looking for outside ‘advice’. Consider the recent news regarding… Read More »
One of my favorite and often overlooked parts of examining spinoffs is the choice of name for the new entity. Generally, this decision requires zero thought as there is a division or some well known product making the choice obvious, such as in the case of Madison Square Garden or Babcock & Wilcox (well…maybe that one isn’t the best example). However, occasionally management needs to flex its creative muscles (by which I mean hire some… Read More »
A few months ago, pharma giant Pfizer (PFE) got a boost when Sanford Bernstein analyst Tim Anderson (and a few other street colleagues) mentioned that company management was open to spinning off or selling parts of the business. This set off a flurry of reports analyzing potential castaways with estimates ending up as high as 4 divisions shed… Read More »
The network behind Mad Men is about to be set free as Cablevision Systems’ (CVC) board of directors approved the spinoff of AMC Networks (formerly known as Rainbow Media). The new company will trade under the ticker AMCX with the share distribution occurring on June 30 to shareholders on June 16th (today). Bear in mind that the Dolan family of NY basketball/hockey… Read More »
Not enough interest in silverware these days? Sure seems that way as German conglomerate ThyssenKrupp AG (TYEKF – US Pink Sheets) announced plans to spin off its stainless steel operations. The move comes just a few months after ArcelorMittal (MT) did the same exact thing with its stainless division, Aperam (APEMY). [See our earlier posts on Aperam here… Read More »
Catching up on some news, Tessera Technologies (TSRA) announced in early April that it has hired GCA Savvian Advisors to explore strategic options for its imaging and optics business, including potentially spinning off the division. In the company’s words, the unit provides “cost-effective, high-quality camera functionality in consumer electronic products through technologies that include Extended Depth of Field… Read More »
Amazing just how quickly plans can change. Just a few months after announcing a grand restructuring plan including two spinoffs, French retailer Carrefour (CRERY) has shelved plans to spin off 25% of its property unit. Carrefour’s stock price has suffered since the spin announcements and the moves were generally derided by analysts and investors as not creating much… Read More »
The energy and E&P business has been no stranger to spinoffs and over the past few years numerous companies have pursued this strategy to unlock shareholder value. So it was no big surprise when in February Williams Companies (WMB) announced plans to split itself into two. To be fair, another reason the announcement wasn’t much of a surprise… Read More »
Companies with histories of spin-offs seem to have a penchant for that particular corporate transaction. Expedia (EXPE), which was spun out of IAC in 2005, announced today that they are planning on splitting the company into two separate pieces, TripAdvisor and Expedia Inc. TripAdvisor will run the current TripAdvisor Media Group, the world’s largest travel site, while Expedia… Read More »
With the economy improving, markets roaring and volatility seemingly subsiding, companies are no longer afraid of approaching the capital markets. As a result, previously shelved spinoffs are now resurfacing. The latest is this week’s IPO of CVR Partners, the nitrogen fertilizer MLP subsidiary of CVR Energy (CVI). The IPO idea was first floated in 2008, but market conditions… Read More »
Sunoco (SUN) announced that the spinoff of SunCoke Energy took another step towards completion last week, as the company filed an S-1 registration statement with the SEC. Many were nervous that the spin would be derailed due to litigation with ArcelorMittal (MT), one of SunCoke’s largest customers, however that issue appears to have been resolved via settlement. From… Read More »