Category Archives: Spin off

Spin off check: Getinge / Arjo AB (ISIN SE0010468116)

One upfront comment: I promise to use the auto correct feature of  wordpress.com in 2018 as often as possible. However, as  I do not have unlimited time to “polish” my posts, there will be always bad grammar and bad spelling as I try to focus my available time on analyis and actual content.

Already some week ago, Swedish based “Med tech” company Getinge AB spun off Arjo AB.

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Cars.com (CARS) – Interesting spin-off opportunity ?

Disclaimer: This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!

 

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Cars.com is a recent (May 31st) spin-off from publishing company Tegna, which itself is a spin-off of the Gannet publishing Group. Interestingly, Gannet/Tegna only bought control of cars.com in 2014 for a total value of 1,8 bn USD.

Cars.com – The business & Market

Cars.com is a typical “Online classified” business, meaning that it collects offers of merchandise (in this case cars), aggregates and sorts them and then shows it to as many potential customers as possible.

The economic value of such a “service” is relatively easy to explain: For a potential customer, it saves time because he can look at and compare different offers at one place. For the sellers, such a service is basically an advertising and/or sales channel which ideally reaches many potential customers.

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Trisura (TSU) – Interesting spin-off opportunity or intransparent minority mess ?

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A friendly reader had mentioned Trisura as a potential Spin-off opportunity in the comments and the stockspinoffinvesting blog mentioned it a few days ago  and linked to a  Seeking Alpha write-up.

At first sight, Trisura indeed looks interesting:

  • it’s a small cap specialty insurer currently mainly active in Canada
  • it hasn’t been “discovered” by sell side analysts yet
  • only mini spin-off dividend for Brookfield holders (1 Trisura stock for 170 Brookfield stock(~0,3%)
  • the company has been growing very quickly over the last few years

This is from the listing prospectus:

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HP Enterprise (HPE) – Spinning-off its way to happiness ?

DISCLAIMER: THIS IS NOT INVESTMENT ADVICE. PLEASE DO YOUR OWN RESEARCH !!!!!

Management summary:

  • HPE, the enterprise arm of the old HP looks attractive on a sum-of-part valuation
  • following 3 spin-offs in 2 years, my model indicates an upside of ~40% in the base case and ~70% in an optimistic case
  • Some “soft catalysts” are on the horizon such as the upcoming Software “spin -off merger”, further share buy backs and a “normal” financial year
  • management acts shareholder friendly, has a clear strategy and has created significant shareholder value since 2011
  • major risk is clearly a further detoriation of the Enterprise solution business which had a bad start into fiscal 2017

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Spin-off watch: SCA / Essity

One of the biggest and highest profile Spin-offs in Europe this year is clearly the separation of Swedish SCA (“Svenka Cellulosa Aktiebolget”) into an “integrated forest product group” which keeps the SCA name and a consumer product entity named “Essity”.

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SCA communicated this already more than two years ago and starting this week, June 12th the spin-off is actually executed, with every SCA shareholder receiving one Essity share per SCA share.

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Italgas SPA (ISIN IT0005211237)- follow & SELL

People who follow my blog for some time know that timing of purchase and sales of stocks is not one of my strengths. I usually buy too early and sell too early. Italgas is one of the very rare exceptions:

When I looked at Italgas and then bought it end of November, I really managed to buy at or very close to the absolute low after the company had been spun off.

Looking at the stock chart we can see that Italgas outperfomed the broad index (lower blue line) but mostly mirrored the Italian small cap index with a slight outperformance if we consider the dividend which was paid early this week (0,20 EUR/share).

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Actelion (CH0010532478) – Merger arbitrage with a potential Spin-off “Gold Nugget” ?

Yesterday, Johnson and Johnson announced that they intend to acquire Actelion, the Swiss Biotech company for 280 USD per share.

The stock price jumped to around 272 CHF/USD right after the announcement indicating a relatively high probability of closing. J&J has enough money on their bank account and according to the press, most Actelion shareholders should be happy.

Closing date is targeted as June 30th. So if everything goes according to plan, this would mean ~2,9% yield for 5 months which is not bad but not that great either (as there are always risks) , so why bother ?

However there is an interesting specialty in this case which I didn’t see when I first looked into it. The official announcement contained this potential “golden nugget”:

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