More spin-offs ahead as execs bullish on deals

Michael Bow
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ONE IN two company executives believe corporate spin-offs will accelerate this year amid higher levels of corporate merger and acquisition activity, a survey has found.

Just over half (54 per cent) of the executives polled by EY said strategic sales will rise this year, with unsolicited approaches from opportunistic buyers sparking the increase.

Most executives (76 per cent) ploughed the cash raised from a divestment back into their business.

“Reallocating capital from non-core to core business and core business adjacencies will be the name of the game in 2015,” EY’s head of divestment advisory services in UK and Ireland Charles Honnywill said.

The rise of the shareholder activists, exemplified by leading US investors like Carl Icahn, is also influencing the rate of divestments, with 45 per cent citing investor activism as an influence on their decision to sell off assets.

“Shareholder activists are bolder than they have ever been, and they leave no stone unturned in their hunt for untapped value,” Honnywill added.

The EY Global Corporate Divestment Study polled 800 company executives across the world.