Author Archives: Inelegant Investor
Hedge fund Paulson & Co, whose activist battle to force The Hartford(HIG) to split itself in two was met by a restructuring plan by the company, has filed a form 13G indicating that its investment is once again passive. Paulson had previously said that the company’s new plan did not go far enough. A company spokesman stated that… Read More »
Whitney Tilson and Glenn Tongue’s T2 Partners returned to Alexander & Baldwin(ALEX) ahead of its third quarter spin. T2, which had sold its entire position in the company late last year, disclosed that it now holds 174,172 shares in a filing today. The position appears to be one of T2’s top 10 holdings. Disclosure: The author holds no… Read More »
On a recent edition of his CNBC show, Mad Money, Jim Cramer, who, it seems, has an opinion on everything, opined on the prospects for ConocoPhillips(COP) and its new progeny, Phillips 66(PSX). Mr. Cramer compared the spin to last year’s similar transaction involving Marathon Oil(MRO), briefly analyzed the two parts, and concluded that the gains have already been… Read More »
Dole Food Co(DOLE) may be a household name, but the company has had more success selling its pineapples than its stock. The venerable company announced this week that it has begun a strategic review which may result in one or more spin offs. Controlled by 88 year old billionaire Chairman David Murdock(he plans to live to 125) who… Read More »
We’ve written here previously about the possibility of embattled bookseller Barnes & Noble(BKS) spinning off its Nook business. We’ve written elsewhere about the turnaround at Microsoft(MSFT). Today, both stories collide in an explosive way. The two companies will create a joint venture to which Barnes & Noble will contribute its Digital and College businesses, and to which Microsoft… Read More »
In a pattern we have seen over and over, just months after simplifying its business by spinning off Suncoke(SXC), Sunoco(SUN) will be purchased by Energy Transfer Partners(ETP) in a deal announced this morning. This combination will create one of the largest and most diversified energy partnerships in the country by expanding ETP’s geographic footprint and strengthening its presence… Read More »
MeadWestvaco(MWV) announced this morning that shareholders as of April 24, will receive .32986547 shares of ACCO Brands(ABD) on May 1, following the spinoff of the company’s Consumer & Office Products Business, and its subsequent merger with ACCO. Concurrent with the merger, ACCO will change its ticker from ABD to ACCO. The transaction is a “Reverse Morris Trust”, which… Read More »
L-3 Communications(LLL) affirmed in today’s first quarter earnings release that it is moving forward with its plan to spin off Engility. With our filing of the Engility initial registration statement, the spin-off of those businesses should occur around mid-year, and we continue to believe that this will unlock opportunity and value for both companies. The performance of Engility… Read More »
After the close of business on April 30, Phillips 66(PSX) will be distributed to shareholders of ConocoPhillips(COP). Phillips 66 will receive refining, marketing, midstream and chemicals businesses from the integrated oil company. ConocoPhillips shareholders will receive 1 share of the new Phillips66 for every 2 shares they own. At the same time, the new Phillips 66 will join… Read More »
Despite previous speculation that the company might sell, rather than spin, its Education business, in today’s earnings announcement, McGraw-Hill(MHP), provided an update on the spinoff plan, and stated that it “remains on track to establish two separate industry leaders by year-end.” The company “has received a ruling from the Internal Revenue Service agreeing to the tax-free status for… Read More »
In a famous Saturday Night Live sketch, a young Steve Martin promised that “You too can be a millionaire, and not pay taxes.” While the advice he proceeded to give was ineffective, using a reverse Morris Trust, your favorite company can sell off a division and not pay taxes. How you ask? Simple. First, borrow as much debt… Read More »
Since Kraft(KFT) announced last year that it planned to spin off its North American Foods business from its Global Snacks business, anticipation has been high to discover what the two new companies would be named. Well, the wait is over. The company undertook a long and deliberate process Last fall, the company invited employees from around the world… Read More »
Mario Gabelli appeared on CNBC yesterday, and among other things, spoke, as he often does, about spinoffs. The CEO of Gamco Investors spoke about his success with recent spins such as Fortune Brands Home & Security(FBHS), Beam, Inc.(BEAM) and Xylem(XYL). Gabelli also spoke about Pepsi(PEP) as a potential split that he likes. Gabelli explained why he likes spinoffs… Read More »
Not all spinoffs unlock value. For one thing, there has to be something of value there to begin with. Spinoffs can sometimes be a tool in the arsenal of those operating in the underbelly of the stock market, promoting stocks with no real business except selling stock. Take U.S. Rare Earth Minerals(USMN). An impressive name, to be sure,… Read More »
We came across this gem recently while perusing a transcript of IAC/InterActiveCorp’s(IACI) 4th quarter conference call. Diller is indeed a veteran of many spinoffs, including Expedia(EXPE) and its new progeny, TripAdvisor(TRIP) Ross Sandler – RBC Capital Markets Just two quick questions. Barry on that theme of using the past to kind of look at the future, given the… Read More »