The final chapter of the Pride International (PDE)/Seahawk Drilling (HAWK) spinoff is nearly complete. Our earlier post noted that both companies were struggling and considering their respective strategic options. Two companies with the same goal, yet oh so different outcomes. Here is a quick update: Pride, an offshore rig contractor with a deep-water focus and international exposure, agreed… Read More »
Anyone else have this experience? A friend suggests a fantastic trip and the best part of all is that he ‘found’ a cheap stay at a nice hotel. The catch? Wasting half of a precious vacation day sitting through a hard sell for a timeshare. Ouch. While it’s fun to see how many freebies the company will throw… Read More »
What an exciting month January was for Sara Lee (SLE). To recap: Brazilian meat processor JBS SA’s bid of $17.50/share is rejected by the board as too low. Rumors of a spinoff begin to surface, but private equity buyers begin to circle and JBS SA plans on increasing their offer. A short while later, the board rejects the… Read More »
Image via Wikipedia Just weeks after its debut, Motorola Mobility(MMI) warned that sales were slowing in the face of Verizon’s iPhone introduction. Despite reporting a profit and beating analyst estimates by $.01, the stock traded down sharply as the company projected a loss for the current quarter. Analysts had, on average expected earnings of $.01 for the current… Read More »
Image via Wikipedia Not surprisingly, an ‘overwhelming majority’ of ArcelorMittal (MT) shareholders approved the spinoff of its stainless and specialty steel businesses today. The new company, Aperam, will be a global leader in stainless steel production, an industry which has been plagued with overcapacity and hurt by the global slowdown. The spin is more conducive to industry consolidation… Read More »
Image via Wikipedia Another day, another spinoff. Marathon Oil (MRO) announced today that its Board of Directors has approved spinning off its downstream operations. The new company will be called the Marathon Petroleum Corporation (MPC – also its expected ticker) and will be one of the largest refiners in the United States with assets concentrated mainly in the… Read More »
Image via Wikipedia After rejecting JBS SA‘s offer of $17.50/share, Sara Lee (SLE) was rumored to be favoring a breakup strategy which would likely involve the spinoff of either its coffee or meats division. It is believed that a spinoff would unlock the value of the unrelated businesses and facilitate the sale of each individual unit. While JBS,… Read More »
While some companies are new to spinning off divisions, others are known for their serial spinoffs. Few however, can match the fecundity of ITT(ITT)(nee International Telephone & Telegraph). ITT was born out of the Puerto Rico Telephone Company in 1920. Over the next half century, ITT was the classic conglomerate, buying such diverse companies as The Hartford Insurance,… Read More »
Image via Wikipedia Experienced traders and seasoned investors often mention discipline as one of the keys to success in this industry. While some speculation is encouraged, drawing the distinction between ‘the good’ and ‘the bad’ kind can be difficult. A common misconception is that this only applies to ‘investors’ however, corporations face similar dilemmas when deploying their capital.… Read More »
Tyco International(TYC) has canceled plans, announced in April, to spin off its Electrical & Metal Products unit to shareholders. Instead, Tyco announced on November 9 that it would be selling 51% of the unit, bow called Atkore, to private equity firm Clayton, Dubilier, & Rice for $720 million in cash. Tyco plans to use the cash to repurchase… Read More »
It looks like the SunCoke spinoff from Sunoco (SUN) might not be completed by the initial target date set by the company of 1H 2011. Ongoing litigation with one of their biggest customers, ArcelorMittal (MT – also a company on our spinoff radar), is the reason for the potential delay. Apparently, ArcelorMittal is claiming that SunCoke subsidiary Jewell… Read More »
Image by Getty Images via @daylife ArcelorMittal’s (MT) board confirmed its plan to spin-off the company’s stainless steel division in the hope of ‘maximizing shareholder value’ and capturing the division’s growth potential. The new company, which will be called APERAM, will be listed on several international exchanges (including Euronext Paris and Amsterdam), but will only trade OTC in… Read More »
Image via Wikipedia In October, when Bill Ackman and Pershing Square Capital disclosed an 11% stake in Fortune Brands(FO), there was speculation that he would push the conglomerate to break up. Today, Fortune announced plans to break into three companies. Fortune itself would retain its Premium Spirits business, led by venerable brands such as Jim Beam, Maker’s Mark,… Read More »
Jim Royal, one of The Motley Fool’s “Rising Stars”, sure has taken a liking to spinoffs. He recently penned a brief note pegging recent spinoff Sabra Healthcare REIT(SBRA), and future spinoffs Rainbow Media and Northrup Grumman’s(NOC) shipbuilding unit as “Spinoff Stocks Worth Watching“. In a followup piece, Royal recommends buying Sabra, which recently spun out from Sun Healthcare(SUNH).… Read More »
Cover via Amazon A corporate conglomerate is truly a wonderful thing. Growth through acquisitions often leaves these companies quite bloated and operating in unexpected areas though. Sometimes this is done on purpose in order to diversify exposure by investing in unrelated areas. These ancillary businesses surrounding the ‘core’ can be quite surprising and make you go ‘Really?’ –… Read More »