To spin off home unit, sell or spin off golf unit
* To remain pure-play spirits company
* Sees development of plan completed in next few months
* Shares up 1 percent (Adds analyst comment, graphic; updates share movement)
NEW YORK, Dec 8 (Reuters) - Fortune Brands Inc (FO.N) will split off its golf and home products units, raising the odds for a takeover of its most profitable business of alcoholic drinks amid pressure from activist investor William Ackman.
Fortune's portfolio includes Jim Beam bourbon, Titleist golf balls and Moen faucets -- brands with little strategic overlap with a market capitalization of $9.3 billion. In October, Ackman's Pershing Square Capital Management became its largest shareholder after buying an 11 percent stake. [ID:nN08198493]
Fortune Brands said it had been considering a restructuring over the last four years as it weighed whether the businesses would be worth more on their own. It said now was a good time to do so as all of the units have emerged from a U.S. economic downturn in better shape than expected.
"While the breadth and balance of our portfolio have served shareholders very well, we see the potential for even greater value by separating our businesses into focused companies," said Chief Executive Bruce Carbonari in a statement.
Fortune will spin off its home and security unit to shareholders in a tax-free transaction, and either sell or spin off its golf business, the world's biggest. It plans to complete plans for these actions in the coming months. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a factbox on Fortune's businesses, see [ID:nN08194158]
For a graphic, see: here
For a Reuters Breakingviews story, see [ID:nN08134108] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
What would remain is Fortune's spirits business, the world's fourth-largest, with $2.5 billion in annual revenue and brands like Sauza tequila and Maker's Mark bourbon.
Analysts say it would be an attractive takeover target, especially for top player Diageo PLC (DGE.L), which lacks a large bourbon whiskey.
"It's really only a matter of time before it gets acquired," said Morningstar analyst Philip Gorham, adding that the spirits business is likely to get the biggest premium of the three segments, due to its strong profit margins.
0 comments:
Post a Comment