Is breaking up retail conglomerates about to become a trend? Last week, Gap(GPS) announced the planned spinoff of its Old Navy brand. Now, Barington Capital is urging L Brands(LB), parent of Victoria’s Secret and Bath & Body Works, to spinoff one of the two brands. Barington has a history of activism and last appeared in these pages when… Read More »
As we discussed back in November 2015, Starboard Value Partners, led by the brash Jeffrey Smith, had acquired a stake in Macy’s(M) and pushed for a spinoff of the real estate into a REIT(Real Estate Investment Trust). Now, with the stock down 60% from Starboard’s purchase price and longtime Macy’s CEO Terry Lundgren stepping down, the plan may… 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 »
Those hoping for the IRS to provide clear guidance on spinoff related tax issues can keep holding their breath because it’s not coming anytime soon, at least according to Robert Wellen, associate chief counsel of the U.S. tax agency. According to Mr. Wellen, these types of projects take a lot of time to complete, but on the plus… Read More »
Yahoo (YHOO) had a tough year in 2015. The core business continued declining, key employees fled and its plans to deliver shareholder value by spinning off its Alibaba (BABA) stake into a standalone company was effectively derailed by the IRS. Unfortunately for the company and its beleaguered CEO Marissa Meyer, the start of 2016 isn’t looking much better… Read More »
Congress is working hard trying to pass a comprehensive spending bill and a tax package extending numerous tax breaks. According to the WSJ, buried in these proposals is a bid to end companies’ ability to spinoff property into REITs: The bill from Rep. Kevin Brady (R., Texas), the chairman of the House Ways and Means Committee, would prevent… Read More »
A few short hits to kick off the week: 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… Read More »
After successfully tossing out the entire board of directors at Darden (DRI) last year, Jeffrey Smith’s Starboard Value fund quickly moved on executing its agenda. After all, a dominating win like that sort of gives one that kind of mandate. One of the first moves was eliminating the ‘interim’ tag from CEO Gene Lee. Next came the expected… Read More »
With Darden (DRI) announcing a real estate spinoff, analysts and investors are flocking to find other targets which could benefit from monetizing real estate assets through a REIT conversion. One reason REITs are attractive is that they tend to trade at higher multiples than other sectors so in theory, a separation ‘unlocks’ value by creating a higher sum… Read More »
Immediately after closing the sale of Red Lobster to Golden Gate Capital, Darden (DRI) began begging for forgiveness from its spurned activist shareholders. CEO Clarence Otis got sacrificed at the altar resigned and the company announced that it would let Starboard nominate three members to its board who would run unopposed. Starboard was not satisfied with this offer though and… Read More »
With the $2.1b sale of Red Lobster to private equity firm Golden Gate Capital all wrapped up, the battle for Darden (DRI) has officially entered the next phase. For a quick and abridged refresher on the situation, the ailing restaurant company was recently assailed by two activist firms pushing for numerous changes including a spinoff of its slower growing restaurants, Red Lobster… Read More »
What to do when a majority of your shareholders support calling a special meeting before you divest an important asset? Go ahead, ignore them, and do what you want, says Darden(DRI). With the $2.1 billion sale of Red Lobster a fait accompli, despite strong opposition from holders, Starboard Value has stepped on the gas in its attack. While… Read More »
While the Olive Garden famously stuffs its patrons with a never ending pasta bowl, its parent company, Darden Restaurants (DRI), is providing investors some never ending drama. Ever since announcing plans to spin off the declining Red Lobster, Darden has been besieged by not one, but two different activist investors. As we noted earlier, Barrington Capital is pushing… Read More »
We’ve been quite remiss in not discussing Darden’s(DRI) plan to spinoff Red Lobster and the ongoing activist fight over the company’s direction. Both Barrington Capital with 2.8% of the company and Starboard Value, with 5.5%, have been sparring with the firm. Barrington had proposed that the the firm separate its low-growth brands, Red Lobster and Olive Garden, from… Read More »