ITT plans to split up into three separate public companies, finally breaking up what in past decades was the paradigm of a sprawling American conglomerate. The split off companies will include the ITT water businesses and its defense units. The remaining ITT will include its aerospace, transportation, energy and industrial products.
Archive for the 'Spinoffs' Category
TNT NV, Europe’s second-biggest express-delivery company, announced plans to reverse course and spin off the business while retaining the smaller mail division.
TNT rose 8 percent in Amsterdam trading, the biggest jump in more than two years, after saying current investors will be offered new stock in the express unit next year. The postal operation will retain a 29.9 percent stake until some financial questions are resolved, Hoofddorp, Netherland’s based TNT said in a statement.
Analysts estimated earlier this year that the express unit was worth about 6.25 billion euros ($8.3 billion) following investor speculation that United Parcel Service Inc. or FedEx Corp. may seek to buy the division. TNT, which had a monopoly on letter deliveries in the Netherlands until last year, started an internal separation of the express and postal businesses in April with the aim of selling the latter.
“This is quite an important change of strategy,” Andre Mulder, an analyst at Kepler Capital Markets, said today. “It’s harder to sell the mail unit because of the strikes and influence from the government. You have a bigger chance selling the express division.”
I think this is likely a great opportunity for the inquisitive investor to earn above average and uncorrelated returns. Currently TNT controls 18 percent of express deliveries on the European continent. Acquiring TNT’s express business once it is spun out would be a great way for either FedEx or UPS to solidify a market position. FedEx has a 2% market share while UPS has a 9% market share.
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