Well that was quick. In what looks to be the briefest stint in modern history (maybe even of all time?), Kraft Food’s (KFT) days as a member of the Dow Jones Industrial Average are coming to an end. A mere four years after usurping AIG’s (AIG) spot in the index, the food conglomerate will be replaced by the… Read More »
After denying spinoff plans for its gift-card subsidiary Blackhawk at its investor day earlier this year, supermarket giant Safeway (SWY) unveiled plans last week for…a spinoff of its Blackhawk subsidiary. Further proof that you can always take a CEO or politician’s word to the bank. For those who are unfamiliar with the business, Blackhawk Network Holdings is a… Read More »
The next round of corporate action at Sears Holding (SHLD) is about to begin as the board of directors set today as the distribution date of the rights offerings to purchase shares of its Hometown & Outlet store spinoff. The new company is expected to trade under the ticker ‘SHOS’ and each SHLD shareholder will receive one rights offering, good for… Read More »
Anyone have any new ideas? I know we have mentioned this numerous times – sorry – but the business and investing world is chock full of followers. We recently wrote about one example in the defense industry, but alas, it is not an isolated case. Take the PC business. IBM (IBM) successfully converted itself into a very profitable software business by dumping… Read More »
Investors in hedge funds, private equity firms, start ups and even some public companies often need to be aware of ‘Key Man’ risk. This refers to the over-reliance on or importance of a few select individuals (or even just one) to the business. Think Warren Buffet and Berkshire Hathaway (no matter what he says). About a year and half… Read More »
If a certain investing strategy delivers returns then you can count on followers and imitators joining the party. Just google ‘how to invest like buffett’. Even this site is an offshoot of Joel Greenblatt’s successful investment strategy. Corporate strategy is the same, especially in the minds of analysts in the investing world – if an idea worked for one company then every company in the… Read More »
Time for a little housecleaning as we catch up on some old news regarding a few potential spins which ended up as sales instead. Can’t win them all. Loral Space & Communications (LORL) had long talked about spinning off its Space Systems/Loral (SSL) unit to shareholders, but instead sold the division to MacDonald, Dettwiler & Associates (TSX:MDA) for $875m. The… Read More »
It only took about a year since the idea was first publicly floated, but Kraft Food’s (KFT) board of directors formally approved the spinoff of its North American grocery business last week. The tax-free spin is expected to be completed after the close on October 1st and shareholders of KFT will receive 1 share of the new Kraft Foods… Read More »
This author wonders what activists will do once the market’s conglomerates have all been broken up. Nelson Peltz of Trian Group gaining a board seat at Ingersoll Rand may be the latest harbinger of yet another spinoff on the horizon. Peltz had been trying to get a board seat and push for change but the company up to this point… Read More »
It’s been a scant three months since Fiesta Restaurant Group(FRGI) was spun out of Carroll’s(TAST) but the new company has already produced impressive results in its first reported quarter. The stock, which began trading in May below $13, closed at $16.16 yesterday. Last week, Fiesta reported its results for the second quarter. The company showed strong comparable store… Read More »
For followers of John Malone and his family of companies, frequent restructurings are nothing new. And he continues to provide special situation investors plenty to do. On the heels of the announced Starz spin, Liberty Interactive executed a previously announced splitoff of the company into new tracking stocks Liberty Interactive (LINTA) and Liberty Ventures (LVNTA). Since the company is remaining one… Read More »
Back in January, we reported that Comverse Technology(CMVT) would be spinning off subsidiary Comverse, Inc., leaving the parent with majority ownership of Verint(VRNT), as well as Starhome, a private company. We speculated at the time that the company would then follow up by distributing its Verint shares and winding down the holding company. Today, it was announced that… Read More »
What do you do when your drug discovery costs swamp your profits from a successful marketed drug. If you’re Elan Corporation(ELN), you spin off your drug discovery business with a bundle of cash, keeping your marketed drugs and late stage pipeline. Elan, an Irish biotech firm, is driven largely by Tysabri,a multiple sclerosis drug marketed with Biogen Idec(BIIB).… Read More »
Carl Icahn is not a patient man, but he also doesn’t easily give up. Throughout his storied career, he has profited from forcing companies to make tough decisions to unlock value. Icahn, who owns 9.64% of Oshkosh Corporation(OSK), lost a bruising proxy battle for six seats in January. At the time he had urged the company to reverse… Read More »
In the largest one day gain on a spinoff announcement we can recall, Dean Foods(DF) jumped over 40% yesterday after announcing it would be spinning off its WhiteWave-Aplro business. The Wall Street Journal reports that this is due to excitement about the company’s smaller organic business “which accounts for less than a fifth of group sales, but 40%… Read More »