CVE, Cenovus Energy from ECA, EnCana Corp

EnCana Completes Spin-off

By: Zacks Equity Research

December 01, 2009 | Comments: 0

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ECA

Following the shareholders’ approval on Nov. 25, EnCana Corporation (ECA - Analyst Report) has completed its split into two highly focused energy companies -- Cenovus Energy Inc. and EnCana Corporation -- on Nov. 30, 2009. Cenovus will be focused on oil sands and refining businesses and EnCana will be focused on natural gas.

Given the uncertainty and volatility in the global financial markets, EnCana had chosen to delay the timing of shareholder vote, originally planned for Dec. 2008.

Under the terms of the arrangement, EnCana shareholders will own one new EnCana common share (which will continue to be represented by existing EnCana common share certificates) and will receive one common share of Cenovus for each EnCana common share held on Dec 7, 2009, the anticipated distribution record date.

Cenovus and the post-split EnCana will begin trading on the Toronto Stock Exchange using the CVE and ECA ticker symbols, respectively, on Dec. 3 and Dec. 9 on the New York Stock Exchange.

We believe that the spin-off promises to unlock significant value. We like EnCana particularly for its balanced portfolio of resource plays, disciplined approach to capital investments, low-cost operating structure and solid balance sheet.

However, we are maintaining our Neutral recommendation for EnCana shares due to the tentative North American natural gas environment.

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ABII Spinoff

Abraxis Bioscience To Spin Off Abraxis Health In 2010

January 29th, 2010 by john

In a terse stock spin-off announcement on January 28, 2010, Abraxis Bioscience (ABII) said that it would be spinning off Abraxis Health some time this year. It was one of those statements that say everything and nothing, and leave you wondering what’s really going on. Sort of like saying that the CFO is departing to “spend more time with his family”.

Here’s what they said:

“By spinning off Abraxis Health as an independent, stand-alone company, we believe we will enhance the intrinsic value of both companies by allowing each company to pursue its differing drug development and commercialization strategies,” said Patrick Soon-Shiong, M.D., Executive Chairman of Abraxis BioScience. “We also believe the spin-off will facilitate each company pursuing the most attractive long-term growth opportunities and business strategies, thereby maximizing shareholder value.”

Maximizing shareholder value is always good and we know the part about the separate units being able to pursue their own strategies. But, is it a good deal for shareholders of the parent, the spin-off stock, or perhaps both? Unlike the CFO leaving for more time with his family, we will be finding out. The mandatory information that the company will be filing with the SEC will see to that. -

Now we just have to wait for those SEC filings and set aside the time to read them. Then we can decide for ourselves whether there is indeed shareholder value in this or not.