What’s up with spin-offs? The formerly sure-fire method for unlocking value (at least in the short term) seems to have lost its mighty punch.
Case in point. Investors have reacted to Messrs. Icahn and Wasserstein’s much-ballyhooed break-up plan for Time Warner with a total yawn. And that's far from the only example. Viacom’s stock hasn't moved either after it announced its plan to undo its merger with CBS.
The prominent dealmaker Leo Hindery, who was previously the CEO of TCI, AT&T Broadband, Global Crossing and the Yes Network and is now managing partner of InterMedia Partners, a private equity firm focused on media, tells me that in his view, investors have grown skeptical of efforts to "blow up" the portfolios of media companies.
The phenomenon isn’t limited to media.
H-P, for instance, has done well of late after resisting demands from shareholder activists to spin off its printing business. This isn’t to say that conglomerates are back in fashion, notes Hindery, only that investors have wised up to the longer-term pointlessness of some financial machinations.
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