I don't think Honeywell management is actually serious about a Aerospace Spin-Off because if they are then the new CEO deserves to be fired because he is a weak yes man to the investors. Aerospace is the largest business segment with the highest margin at almost 23%. Without Aerospace Honeywell's margin would be 16-17%. 3M, the company that Third Point argues is valued higher has a margin of almost 24% as a company! This whole discussion seems very stupid to me and I don't have a MBA from Harvard. If Honeywell does separate from Aerospace then Aerospace will look way better as a company. Dave Cote would have never entertained this thought...
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HON leadersht is VERY concerned about what employees will say to customers regarding this. They haven't ever stated they would NOT spin aero off so it sounds like it's something they're considering. I can't wait to work for a company that isn't ran by mentally challenged sicophants!
All these idiots care about is money. If they will get a fat bonus for selling AERO, it will be done. This could very good for aerospace if they sell it to a company that isn't ran by greedy, backstabbing and incompetent dipshits. Maybe the new company wouldn't put customers and employees last? Perhaps they'd even appreciate the employees. I know, dare to dream.
If someone came a long and offered up the right number, Hon would let Aero go in a heartbeat. I doubt it will happen. Sale are declining, all the cost savings have pretty much been squeezed out, stock is high. Only reason to buy would be if someone thinks they could corner some markets and raise prices. Allied Signal bought Honeywell in 1999 because they had a good opportunity to combine, slash and reduce. The hedge fund is trying to talk stock up to bail.
This could go either way. If Third Point is now in the top 5 shareholders as at least one news article says, and they only had about 1 million shares as of December 31, 2016, then they acquired about 24 million shares since the end of last year to put them in the top 5 (google top Honeywell shareholders to see the amount of stock they hold if they are considered an institution instead of a fund). Honeywell's Investor Relations department would have been tracking all those purchases, and if you look on Yahoo at trading volume you can see some clear spikes beginning in early January. Corporate must have guessed this was coming.
I think this has been Dave C plan for awhile. Look back over the past 2 years and the functions that moved to Corporate and the Rifs. Closings etc. He is one Greedy MOFO he got his millions on the backs of the employees. Why would he stop now?? Have a glass of $500.00 wine and think that over.
The margin though, is based on what the cost of doing business is.
Honeywell has been operating like a ghost ship for many years and nobody knows what the real cost of doing business in Aerospace is. With free overtime mixed in, what is the expectation of what a 40-hour-week-workforce is, compared to the corporate shell game? They've been double-dealin'-n'-stealin' for so long, that would a new buyer keep that going, or actually feed the empty belly?
Third Point is a greedy Hegde fund and will sell the stock as soon as it jumps on the news of a spin-off
I absolutely agree good post
Tell that to people who have no logic