Three Consumer Goods Companies That May Benefit From Spinoffs
Jan 20, 2015
By Michael Ide, Staff Writer at ValueWalk: The Edge Consulting Group (ECG), which issues regular reports on special situations, has recommended that its clients keep a close watch on Energizer Holdings, Inc. (NYSE:ENR) Holdings, Unilever N.V. (ADR) (NYSE:UN) N.V., and Wyndham Worldwide Corp. because they are hovering above what ECG considers to be a great entry point. Energizer Holdings is going to split into two separately listed companies later this year, and ECG thinks that Unilever and Wyndham could be gearing up to spin off some of their divisions as well.
The household business (including the eponymous batteries that spring to mind) could be an acquisition target for Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) , which already owns Duracell, or Spectrum Brands Holdings, Inc. (NYSE:SPB) , which makes Rayovac and Varta brand batteries. The personal care business has even more possible buyers including Colgate-Colgate-Palmolive Company (NYSE:CL) , Unilever, Reckitt Benckiser, Church & Dwight, and Henkel and Beiorsdorf. ECG sees a 7% upside to current valuations if the two divisions remain independent and a 45% upside if they get bought, but recommends that investors wait for the stock to fall to $115 before buying (currently trades at $129).