1) Autogrill spa (OTC:ATGSY)/World Duty Free Group (WDF.MI) – this is an easy one as the spinoff was actually completed last October. Autogrill retained its food & beverage business which operates restaurants in locations such as airports, railroad stations and alongside highways. This business is tied to the economy and the price of fuel/road travel and had little tie in to its duty free shop business, World Duty Free Group. The spinoff will enable the duty free company to pursue M&A opportunities in a sector many believe to be ripe for consolidation. The market seemed to really like this one and soon after the spin, Value & Opportunity highlighted the situation’s strong performance.
Verdict: Move to ‘Recent Spinoffs’ page
2) Pfizer (PFE)/Zoetis (ZTS) – This is a situation that we actually covered in quite a bit of detail. Pfizer started considering its ‘strategic options’ for several of its units, including its growing animal health business, back in 2011. The company named the unit Zoetis and opted to offer ~20% of it in a well received IPO in early 2013. At the time of the transaction, the company signaled that a spinoff of its remaining 80% stake might be in the cards at a later date. Ultimately, Pfizer ended up opting for a ‘split off’ via exchange offer where Pfizer shareholders could exchange their PFE shares for ZTS shares at a discount. The exchange offer expired on June 21, 2013 and was oversubscribed so Pfizer was able to unload its entire stake in Zoetis.
Verdict: Even though this was not a pure spinoff, can still move it to ‘Recent Spinoff’ page and note that it was an exchange offer.
3) American Airlines(now AAL)/American Eagle – this is another situation that has been dragging on for quite some time. Rumors of a possible regional airline spinoff at AMR had been ongoing for years, but the company only formally announced the move in 2011. The spinoff was delayed due to contract negotiations with the pilot’s union and then plans got really iced when the AMR Corporation, the struggling parent company, filed for bankruptcy later that year. American Airlines has since been acquired by US Airways and the newly merged entities haven’t announced any plans for its now larger and more complex regional jet operations. It’s possible and likely that the company will end up doing something with its regional jet operations, but when or what remain unclear. If a spinoff pops back up on the radar, we can bring it back to the list, but it’s time for it to go now.
Verdict: Remove
A few names moved to their proper places and one removed from the list. A solid start, but there are a couple of other names which need updating and we hope to get to those shortly.
Disclosure: Author holds no position in any stock mentioned.