By Michael J De La Merced, Senior Writer, NYT DealBook:
Though 2014 has been known as a banner year for megadeals, it has also been chock-full of a different kind of corporate maneuver: the spinoff, seen at work at companies ranging from Hewlett-Packard to eBay to Symantec. And, according to a report to be published on Thursday, next year is poised to be filled with even more breakups. The reason is simple, according to the consultancies the Edge and Deloitte: successful spinoffs generate significant returns. The two firms’ analysis concludes that such transactions add, on average, 14 percent to a parent company’s stock price by a year after the move, while the spun-off entity enjoys a 22 percent rise in its own shares.
Those percentages tend to outperform the MSCI World Index of stocks by double-digit percentages for the comparable period. Shareholders, especially activist investors, have also been big proponents of spinoffs. The billionaire Carl C. Icahn pushed eBay for months to consider a breakup.