I’ve just finished the chapter in Joel Greenblatts book on Spin-offs and how the canny private investor can profit from them. I did a quick google for ”spin off lse” today and noticed the Cookson group has very recently split into two new companies – Vesuvius and Alent. One is to do with steel, the other ceramics/chemicals i believe. A cursory glance is all i’ve given to this situation to see if Joel’s principles could apply in this spin off situation. The answer is that they do not. Both new companies have large market caps and so are accessible to an institutional investor. This eliminates the small investor advantge.
That’s not to say that either company may not be a good investment on its own merit, but that the opportunity inherent from a specific type of spin off can not be found here on account of the large market caps of both new companies. Never mind, at least i’m putting my new analytical skills into practice.