Corporate divorces are hard, but are often worth the pain / The Edge urges Amazon & Disney Spinoff
Oct 30, 2014
By Katherine Ruston, US Business Editor, The Telegraph.
The average corporate split generates more than eight times the value that the same company would have had without a break-up. Breaking up is hard to do. At least that’s what the singer Neil Sedaka told us. But done the right way, it can be well worth the trouble.
Amazon and Disney could be among the next in line, say analysts at The Edge Consultancy, a firm which specialises in evaluating corporate spin-offs. The logic is easy to see. “A spin-off would help to get Amazon re-rated because of the higher margins that AWS is expected to have,” says Ryan Mendy, the Edge Consultancy’s chief operating officer. Amazon’s investors are fed up with waiting for the company to move into the black, and eager to see it do something with Amazon Web Services (AWS), its massive cloud-computing business. The unit does not disclose its profits, but rakes in…