Research
*Research published here is selective and posted 7 days or more after distribution to clientsLMC (Entertainment) Split-Off: Games People Play
November 19th, 2009
Value discovery is a favorite play of management and this Split-Off primarily allows the market to value the entertainment assets more fairly. But the real benefit of the transaction would accrue to Mr. Malone, who will enjoy more voting power over DIRECTV, once the merger goes through. The transaction benefits him in two ways: More voting rights in DTV and value enhancement of his stake. Still, the transaction is beneficial to all stakeholders and we recommend a BUY.
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Julius Baer/GAM – Pure Private Banking a Compelling Story While GAM to be a Turnaround Story
September 30th, 2009The Julius Baer Holding split (on September 30th 2009) will result in two independently listed companies, with Julius Baer Group solely concentrating on providing high-quality services to private banking clients and GAM Holding focusing on active asset management. The extraordinary general meeting held on June 30th 2009, approved Julius Baer Holding to be renamed GAM Holding, with current shareholders of Julius Baer Holding to own two shares: GAM Holding (the current share) and Julius Baer Group (the newly listed company), which will be paid in the form of a dividend in kind (one for one).
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OIL India Privatization – ‘Subscribe’ – Second largest E&P Company in India
September 2nd, 2009Oil India Ltd is soon to be privatized with an IPO through a 100% book building process with a price band of INR 950-1,050 per share and expects to raise funds in the range of INR 25.1bn- INR 27.8bn, through the fresh issue of shares. The IPO is valued at a FY10E P/B of 2.0x-2.2x. We believe this is reasonably priced as compared to its Peer average FY10E P/B of 3.1x
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PDE – Drilling Deep to Find Value
August 24th, 2009On Aug 4, 2009, the board of directors of Pride International (PDE) made a strategic decision to focus on Deepwater and decided to Spinoff its Mat Jack-up rig, which caters to shallow water drilling. The Mat Jack-up rig revenues in the Gulf of Mexico (GoM) has been declining over the last few quarters with a sharp fall in utilization and day rates. Pride management is justified in dumping this low growth business to focus on the high growth Deepwater drilling business, which has high utilization and day rates.
All the steps preceding the Spinoff are complete. For each share of PDE that a shareholder owned at the close of business on Aug 14, 2009, the record date, they will receive 1/15 of a share of Seahawk (HAWK) stock on the Spinoff date.
Click here to read page 1 of the (43) page research note.
CareFusion Spinoff to unlock value for distribution giant
August 21st, 2009Trotting along the paths of similar MedTech companies, CareFusion prepares to extricate itself from the shadows of its big brother (Cardinal Health) later this month. The Spinoff of CareFusion comes at a time of heightened activity of reforms in the Healthcare industry. We believe that this will be an appropriate time for the Spinoff to happen as it will earn time for both the companies to focus and leverage on their core strengths and prepare for post reforms era. Cardinal’s Board approved the Spinoff on July 10, 2009. Accordingly, CareFusion will distribute 80.1% of its common stock to Cardinal Health shareholders in the ratio of 0.5:1 while 19.9% stake will be retained by Cardinal Health (with a commitment to dispose this stake in less than 5 years).
