ITT passes spinoff test as it splits into three companies
The former ITT Corporation avoided many of the missteps of other major public firms when it spun off two companies, ITT Exelis and Xylem, this week.
Investor relations professionals say ITT's spinoff process could serve as a model in terms of how to communicate such a complex corporate move.
“They have made a very good case in terms of why they spun off those two businesses,” says Gene Marbach, group VP at Makovsky + Company. “They've done everything right.”...
... Companies can also lose as much as 40% of institutional investors who go elsewhere to rebalance their portfolios, says Marbach, adding that there is also risk that new companies will fail to attract new investors.
“Companies have to identify the institutional audience for their new businesses because both the spinoffs and the remaining business will have different characteristics than when they were part of a single entity,” he adds. “Everyone has a new story to tell, and in some cases, a new investor community to tell it to.”...
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