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Valero Completes CST Brands Spinoff

By
Spin Doctor
– May 2, 2013Posted in: Stock Spinoffs

It’s official folks. Valero (VLO) completed the spinoff of CST Brands (CST) and the company began trading today as an independent entity on the NYSE. The new company operates in the US & Canada as an independent retailer of fuel and convenience merchandise while Valero is now a “more-focused refining, wholesale marketing, and alternative fuels company.” The Motley Fool’s Jim Royal is pretty excited about this one and has already bought into the company. Not that this means much, but CST was down slightly while Valero was up over 4.5% today (as of this writing). Valero may not be done though. During its earnings call earlier this week, the company brought up the possibility of also spinning off its midstream operations into an MLP after the CST transaction was completed. Several other companies have already successfully pursued this strategy so it is no surprise that Valero is considering the move. We will keep you updated if this progresses from idea to action. For all of our earlier coverage of the CST Brands spinoff, click here. Disclosure: Author holds no position in any stock mentioned. Related articles Valero Set To Spin Off CST Brands on May 1 To Shareholders Of Record On April 19 (stockspinoffs.com) [...]

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Munich Court Gives Osram Spin The Go Ahead

By
Spin Doctor
– April 30, 2013Posted in: Stock Spinoffs

Well that didn’t take long to get back on track. After shareholders overwhelmingly approved Siemens’ (SI) Osram lighting spinoff, the transaction was quickly derailed by a lawsuit. A small group of shareholders claimed the meeting was invalid due to acoustics issues, a charge which Siemens considered ’without merit’. A Munich judge agreed with the company and tossed the complaint stating the shareholders “did not participate adequately in the AGM.” I know the US gets a bad rap for being a litigious society – and we are no legal experts here – but this case seemed pretty soft. While the spin will no longer take place in April (obviously), I would expect this to get back on track shortly. This could be interesting as the lighting industry is going through quite the transformation as LED lights become more mainstream and Osram will likely be one of the major players in the space. Cree (CREE), one of the leaders in LED lighting, has seen its share price explode this year (despite a recent earnings hiccup) as growth in the lighting sector continues to pick up. There should be some additional information later this week when Siemens issues its earnings report As a reminder, Siemens shareholders will receive 1 [...]

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Mondelez International Attracting Big Name Investors Like Ackman and Peltz

By
Spin Doctor
– April 23, 2013Posted in: Stock Spinoffs

News of Nelson Peltz’s Trian Fund Management ridding itself of all Kraft related positions turned out to be off…very off. In an amended Q4 13F filing released last week, the hedge fund revealed a large stake of over 19 million shares (a bit more than $600m worth) in Kraft’s international snacks spinoff Mondelez International (MDLZ). There was still no position listed for the Kraft Foods Group (KRFT) so he must have unloaded that one. Based on that info and the ~8m pre-spin Kraft shares Trian owned in its September 30th filing, it is possible (not that it really matters) that the fund upped its stake in MDLZ post-spin. The amended filing also revealed that the fund had accumulated a sizeable new stake in PepsiCo (PEP). How could these positions just appear months later? In the original 13F filing, the fund noted that some ‘confidential information’ was omitted. I am not an expert on SEC filings (perhaps a reader can offer more insight), but this page on the SEC website notes that managers can request for information to be omitted in a 13F filing (although it still must be submitted to the SEC) for various reasons including risk arbitrage or to protect [...]

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DE Master Blenders Scooped Up By JAB Led Group

By
Spin Doctor
– April 22, 2013Posted in: Stock Spinoffs

When discussing spinoffs, analysts often toss in a comment about how the new slimmed and focused companies will be more attractive acquisition targets. After all, who doesn’t like the idea of a relatively quick exit with a nice premium? Sometimes they are right though and the most recent one to be acquired is Sara Lee spin DE Master Blenders 1753 (OTC:DEMBF). In case you don’t recall, the Sara Lee name was dropped last year when the company split into a meats & food service focused business – Hillshire Brands Companies (HSH) – and an international coffee & tea business, DE Master Blenders 1753. The coffee company had some accounting issues earlier on in Brazil and performance was relatively flat in 2012. The stock popped though when word of a potential tie up with an investor group led by Joh A Benckiser (JAB) leaked at the end of March. The price thrown about was €12.75, but a board supported €12.50 cash offer came in shortly thereafter. JAB, a privately held holding company, already owned ~15% of the company’s shares and the acquisition of DE Master Blenders represents a further leap into the coffee & tea space by the firm which had previously snatched up both [...]

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Creditors Of Bankrupt Patriot Coal Seek Redress From Former Parent Peabody Coal

By
Inelegant Investor
– April 8, 2013Posted in: Stock Spinoffs

In 2007, it was all smiles as Peabody Energy(BTU) spun off Patriot Coal(PCXCQ). But loaded  with debt and retiree health and pension obligations, Patriot filed for bankruptcy in July 2012. Now, Patriot and  its creditors, led by the United Mine Workers of America, are investigating whether the spinoff was a fraudulent transfer which might give Peabody back the hot potato it sought to dispose of in 2007. Creditors will point to the large liabilities and claim that Patriot was insolvent from its inception.  Peabody will point to five years of operation prior to bankruptcy, to the financial crisis, to the weakness in the coal market, and to decisions by Patriot management. It is difficult to handicap the likelihood of these claims being successful, but it is something Peabody shareholders should be watching closely. Disclosure: The author holds no position in any stock mentioned Related articles Peabody Dispute Patriot Coal Healthcare Claims (dailyfinance.com) Patriot, creditors ask for probe of Peabody Energy (stltoday.com) 13 arrested at Peabody Energy protest in downtown St. Louis (kmov.com) Patriot investigating ‘fraud’ claim involving its creation (courierpress.com) UMWA chief blasts Patriot Coal bankruptcy move (miamiherald.com)

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Seven Years After Spin Off From Sara Lee, HanesBrands Finally Begins Paying Dividend

By
Inelegant Investor
– April 8, 2013Posted in: Stock Spinoffs

In 2006, Sara Lee, now Hilshire Farm(HSH), loaded up HanesBrands(HBI) with lots of debt and spun it off. Seven years later, after weathering a financial crisis, steadily paying down debt and improving profitability, the company has announced it will pay a quarterly dividend of $.20, beginning in June.  The dividend will be paid on June 3, to shareholders as of May 20. “Initiating a quarterly dividend is a substantial company milestone made possible by strong strategic execution, successful debt reduction and cash-flow generation, and margin-improvement prospects,” Hanes Chairman and Chief Executive Officer Richard A. Noll said. “With our successful track record and long-term outlook, the Board decided it was time to institute a regular quarterly dividend.” The company also pre-announced excellent earnings for last quarter and reaffirmed guidance for the year.  We have long been bullish on HanesBrands and are glad to see this important step in the company’s growth. Disclosure: The author owns shares in HSH and HBI Related articles Hanesbrands to Pay its First Dividend (fool.com)

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Energy Edge Solutions Soaring On The Dry, Fried Wings Of A Chicken, Err, A Gourmet Chicken

By
Inelegant Investor
– April 8, 2013Posted in: Stock Spinoffs

We love all our posts equally, really we do. It’s just that some posts are more equal than others.  We take a guilty pleasure in writing up nanocap stocks that have decided to pursue a spinoff.  While we have seen many nanocaps with value(and we own significant stakes in several), we have yet to see a spinoff in a company of this size that contained any real value in either of the surviving companies.  So when Energy Edge Technologies(EEDG), with a market cap of just $2.56 million, announced on Friday that it planned to spin off Energy Edge Solutions, we got right to work. Energy Edge Solutions, as you are almost certainly not aware, is a tiny, money-bleeding energy consultancy which helps companies optimize their energy consumption. Late last year, the company merged with the Dry Fried Wing Company, moved the energy business to a subsidiary and increased the ownership stakes of management in the subsidiary. Thankfully, the company did not insult us by promising synergies between the energy consulting business and the fried wing business. Now, just half a year later, the company is reversing the process. Sound and fury, signifying nothing? Nothing of value for shareholders, certainly. Once [...]

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Valero Set To Spin Off CST Brands on May 1 To Shareholders Of Record On April 19

By
Inelegant Investor
– April 8, 2013Posted in: Stock Spinoffs

Thanks to several alert readers who point out that, while we were asleep at the wheel, Valero(VLO) announced the final details of its CST Brands spinoff. It was just last week that we reported the company was two steps away. Those steps are now complete. Valero issued a press release on April 4, confirming that it had received a private letter ruling from the IRS granting tax free status to the spin off. Subsequent to receipt of the ruling, the company’s Board approved the spinoff. The company will be spinning off 80% of CST Brands on May 1. Valero shareholders on the record date of April 19 will receive one share of CST for every nine shares of Valero that they own.The company expects that both CST and VLO will begin trading on a when issued basis on April 17, and that CST will begin trading regular way under the ticker CST on May 2. The company will retain 20% of CST for at least six months, but plans to divest the stake once the six month period has passed. The full information statement can be found here.  CST will operate around 1900 retail locations, a bit more than half [...]

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Valero Two Steps Away From CST Brands Spinoff

By
Inelegant Investor
– March 31, 2013Posted in: Stock Spinoffs

Investors who have long been anticipating Valero’s(VLO) spinoff of retail division CST Brands(CST) won’t have to wait much longer. According to Convenience Store News, Valero Chief Financial Officer Mike Ciskowski said at a recent luncheon that the company was just waiting for an IRS ruling that the transaction would be tax free to shareholders, and for final Board approval. He said that such a ruling typically takes between four and six months and that the company had filed five months ago.  Board approval would quickly follow. Once these steps are complete, Valero will distribute 80% of CST to shareholders and sell the remaining 20% over the year that follows. Valero’s retail operation of 1900 convenience stores and gas stations including 1032 in the United States is thought to be undervalued when combined with the firm’s core refining business. The company expects that significant value will be unlocked by executing this spinoff. Disclosure: The author holds no shares in any stock mentioned Related articles Valero faces one hurdle before retail separation (mysanantonio.com) Valero Cancels Sale of California Refineries (blogs.wsj.com)

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HART IPO Set For Early April, Harvard Bioscience To Spin Off Remaining 83% Stake In 120 Days

By
Inelegant Investor
– March 31, 2013Posted in: Stock Spinoffs

In December, Harvard Bioscience(HBIO) filed for an IPO of Harvard Apparatus Regenerative Technologies(HART). Last week, the company announced that the tax free spinoff was approved by the IRS, and that an IPO of 17% of the company would be conducted in early April at an expected price of $10-$12 per share. The company will spin off the remaining 83% to shareholders 120 days after the offering closes. Disclosure: The author holds no position in any stock mentioned Related articles Harvard Bioscience prepares HART spinoff; HART readies for IPO (bizjournals.com)

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