wsj_0376.xml

WSJ891031-0138 WSJ891031-0138 = 891031
= 891031
891031-0138 . 891031-0138 . International : @ Courtaulds PLC @ Plans to Spin Off @ Textiles Business @ ---- @ By Craig Forman @ Staff Reporter of The Wall Street Journal International : @ Courtaulds PLC @ Plans to Spin Off @ Textiles Business @ ---- @ By Craig Forman @ Staff Reporter of The Wall Street Journal 10/31/89 10/31/89
10/31/89
WALL STREET JOURNAL ( J ) WALL STREET JOURNAL ( J ) COU COU DIVIDENDS ( DIV ) STOCK MARKET , OFFERINGS ( STK ) TEXTILES AND APPAREL ( TEX ) DIVIDENDS ( DIV ) STOCK MARKET , OFFERINGS ( STK ) TEXTILES AND APPAREL ( TEX ) LONDON LONDON Courtaulds PLC announced plans to spin off its textiles operations to existing shareholders in a restructuring to boost shareholder value . The British chemical and textile company 's plan , which requires shareholder approval , would create a new , listed U.K. stock with a probable market capitalization between # 300 million -LRB- $ 473 million -RRB- and # 400 million , analysts said . The establishment of the separate company , to be called Courtaulds Textiles , could be effective as early as next year 's first quarter . Investors welcomed the move . Courtaulds ' shares rose 15 pence to 362 pence , valuing the entire company at about # 1.44 billion . Courtaulds ' spinoff reflects pressure on British industry to boost share prices beyond the reach of corporate raiders . Courtaulds ' restructuring is among the largest thus far in Britain , though it is dwarfed by B.A.T Industries PLC 's plans to spin off roughly # 4 billion in assets to help fend off a takeover bid from Anglo-French financier Sir James Goldsmith . The divested Courtaulds textile operations had operating profit of # 50 million on # 980 million in revenue in the year ended March 31 . Some analysts have said Courtaulds ' moves could boost the company 's value by 5 % to 10 % , because the two entities separately will carry a higher price earnings multiple than they did combined . In addition , Courtaulds said the moves are logical because they will allow both the chemicals and textile businesses to focus more closely on core activities . Courtaulds has been under pressure to enhance shareholder value since takeover speculators -- including Australian financier Kerry Packer -- surfaced holding small stakes last year . Though Mr. Packer has since sold his stake , Courtaulds is moving to keep its institutional shareholders happy . Even without a specific takeover threat , Courtaulds is giving shareholders `` choice and value , '' said Julia Blake , an analyst at London stockbrokers Barclays de Zoete Wedd . In a statement , the company said : `` Both parts can only realize their full potential and be appropriately valued by the market if they are separately quoted companies . The sharper definition and the autonomy which each will thereby gain will benefit shareholders , customers and employees . '' Courtaulds Chairman and Chief Executive Sir Christopher Hogg will remain in both posts at the surviving chemical company after the spinoff .