re: Ann: Demerger of GPG Australia and Restru... For asnyone...

re: Ann: Demerger of GPG Australia and Restru... For asnyone interested, GPG are moving with the leaders. The AFR has an article today- "Demergers the new black". This is an emerging trend in a changing environment where significant shareholder value can be unlocked by demerging businesses which dont logically fit with each other too well and the management want to make the amin business more appealing. Orica has just spun off Dulux, which may soon become a takeover target, now that Wattyl agreed to a cash offer from US based paints giant Valspar. Fosters will split its wine assets, which have underperformed for some time. Arrow is going to split off its CSG holdings in SE Asia into a new entity called Dart Energy. GPT expects to add $365 million of value.
It may not add a lot initially, but after 18 months the newly listed company tends to outperform the market buy about 10%. Demergers make businesses easier to value. Fosters is a classic example where one division has been holding back an otherwise strong business.