Special Situation Investing

Saturday, April 08, 2006

(TYC) Tyco Split-Up

2:02 PM April 14,2006

An opinion piece on the Tyco split-up with mixed signals.

April 10,2006
Tyco announced last January that they are going to split the conglomerate into 3 independant entities. The breakup will probably occur early 2007. Analyst opinions on the potential value unlocked is mildly optimistic at best. However, it seems that part of the indifference stems from recent weakness in core business results. Specifically:

"net income fell to $570 million, or 28 cents a share, compared with $730 million, or 34 cents a share, in the year-earlier period. Adjusting for a $237 million after-tax loss from the sale of its Plastics, Adhesives and Ludlow Coated Products businesses, income came to 39 cents a share.

Analysts polled by Thomson First Call forecast earnings, on average, of 38 cents a share."

In the latest news, Tyco has announced that it's electronics division, will be relocating it's headquarters to the Philadelphia area.


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