Latest news with #ElliottInvestmentManagement
Globe and Mail
a day ago
- Business
- Globe and Mail
Dividend-paying conglomerates with break-up potential that may reward investors
Sustainable dividends from conglomerates well placed to unlock holding company discounts. Honeywell International Inc. HON-Q shares rose early this week after the industrial conglomerate reiterated plans to split into three independent companies. The move, spurred by activist investor Elliott Investment Management, should further lift Honeywell's share price and so shrink its 'holding company discount.' That's the tendency for multifaceted conglomerates to trade for less than the total value of their various parts. Holding companies often see their share prices rise after opting to break themselves up into their constituent businesses. Essentially, the market finds it easier to assess the value of 'pure-play' firms. We started with our extensive list of dividend-paying Canadian and U.S. companies, before singling out conglomerates offering steady growth prospects – as well as breakup potential. We then applied our TSI Dividend Sustainability Rating System to home in on top dividend payers. Our system awards points to a stock based on key factors: Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above average sustainability; average sustainability, four to six points; and below average sustainability, one to three points. TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor, and the TSI Dividend Advisor. TSI Network is also affiliated with Successful Investor Wealth Management. Our TSI Dividend Sustainability Rating System generated five stocks: Montreal-based Power Corp. of Canada POW-T holds controlling interest in Great-West Lifeco Inc., IGM Financial Inc. and much more. Calgary-headquartered ATCO Ltd. ACO-X-T owns 52.5 per cent of Canadian Utilities Ltd. CU-T but also ATCO Structures & Logistics and 40 per cent of Neltume Ports; the latter operates 18 ports and related operations in South America. Honeywell International Inc., based in North Carolina, had already spun off two subsidiaries (Resideo Technologies Inc. and Garrett Motion Inc. GTX-Q) to shareholders in 2018 and now plans to break up even further. Global conglomerate 3M Co. MMM-N, with headquarters in Minnesota, sells a wide array of products with little overlap and so has a lot of breakup potential. In fact, it spun off its health care unit as Solventum Corp. SOLV-N last year. Washington-based Danaher Inc. DHR-N has made a number of breakup moves in the past but still has a varied range of businesses well-positioned for hiving off as standalone firms. We advise investors to do additional research on investments we identify here. Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.
Reuters
4 days ago
- Business
- Reuters
Q&A: Is Venezuela about to lose Citgo, its most prized foreign asset?
HOUSTON, June 16 (Reuters) - A U.S. court-organized auction of shares in the parent company of Venezuela-owned Citgo Petroleum has entered its final stages, with bidders submitting improved offers for the U.S. refiner and creditors hoping to recover a portion of the proceeds. The auction stems from an eight-year-old case that Canadian miner Crystallex initiated in Delaware against Venezuela. The court found Citgo's parent, PDV Holding, liable for Venezuela's debts and expropriations, paving the way for over a dozen other creditors to pursue compensation of nearly $19 billion. Despite delays, the auction has progressed, especially since last year, through two bidding rounds. A $3.7 billion offer by Contrarian Funds' affiliate, Red Tree Investment, was selected in March as a starting bid and is now being challenged by rivals. Besides Red Tree, companies competing with improved bids include trading house Vitol, and a consortium including an affiliate of Gold Reserve (GRZ.V), opens new tab, Rusoro Mining (RML.V), opens new tab, and Koch. Elliott Investment Management's affiliate Amber Energy is also considering whether to submit a bid, following a separate court decision favoring a possible offer, according to a source familiar with the matter. A court officer overseeing the auction, who last month said new bidders could emerge right before a June 18 deadline to submit offers, must recommend the auction's winner by July 2. The judge and parties in the case are expected to attend a final hearing on August 18. How big a loss could this be for Venezuela? If Venezuela, which owns 100% of the refiner and its U.S.-based parent companies, fails to retain some equity, it would lose its most significant overseas asset. The country, with foreign debt reaching $150 billion, has already lost other assets in Europe and Asia to creditors. Delaware Judge Leonard Stark has left open a possibility for parties representing Venezuela to submit an offer. But boards supervising the seventh-largest U.S. refiner would need to secure backing from politicians in both Caracas and Washington, a challenge given U.S. sanctions on the OPEC nation and otherwise strained ties. Prior to the sanctions, Citgo's 807,000-barrel-per-day refining network was a primary processor of Venezuela's heavy sour crudes. Since Citgo cut ties with its ultimate parent, Caracas-based PDVSA, in 2019, Venezuela has struggled to find new markets for its oil, while the Houston-based refiner has sourced crude from other suppliers. Venezuela's opposition has worked for years to retain Citgo, including funding legal defenses and lobbying in Washington. The U.S. Treasury Department, which has shielded Citgo from creditors in recent years, must approve the auction's eventual winner. Opponents of Venezuelan President Nicolas Maduro have stated Citgo could aid the nation's economic recovery if democracy is restored. Maduro's officials have rejected U.S. sanctions and called the auction the "robbery" of a sovereign asset. Can creditors claim post-auction compensation? Yes. Many creditors including ConocoPhillips (COP.N), opens new tab, which holds the largest claims for almost $12 billion, and Gold Reserve, have pursued legal action outside of the U.S. to seize Venezuela-owned assets, such as bank accounts, tankers and PDVSA-controlled storage facilities. The creditors, who rejected the outcome of a bidding round last year due to conditions imposed by the selected winner, can submit objections if dissatisfied with its results. They can also continue parallel cases in other U.S. courts. Accumulating legal costs and uncertain recovery prospects led three of the 18 creditors originally cleared by the court to withdraw. Others, including an owner of artifacts that belonged to Venezuelan independence hero Simon Bolivar, did not fulfill all court requirements to participate. Will all creditors be compensated? Unlikely. While Citgo was valued between $11 billion and $13 billion as part of the Delaware case, expectations are that the auction will yield no more than $8 billion, factoring in potential side agreements with key creditors, like bondholders. Citgo's recent weak performance, including a profit that plummeted to $305 million last year from $2 billion in 2023, is also expected to affect its valuation. These factors suggest that more than half of the 15 registered creditors, collectively claiming $18.9 billion, may not receive distributions from the auction.
Bloomberg
12-06-2025
- Business
- Bloomberg
Sumitomo Realty Seeks $700 Million Office Sale Amid Elliott Push
Sumitomo Realty & Development Co., the Japanese developer facing pressure from Elliott Investment Management to boost its value, is seeking to sell a group of office properties in Tokyo for at least ¥100 billion ($700 million), according to people with knowledge of the matter. The developer has earmarked 19 midsized office buildings for the divestment, according to documents seen by Bloomberg. It has asked real estate investment firms and agencies to estimate the value of the offices, which it is considering selling separately, the people said, asking not to be identified because the matter is private. It is also weighing the sale of eight rental apartment buildings in the city, they said.
Bloomberg
09-06-2025
- Business
- Bloomberg
Elliott Calls for Sumitomo Realty Improvements in Rare Letter
Elliott Investment Management is calling for Sumitomo Realty & Development Co. to improve shareholder returns and corporate governance, saying the Japanese real estate developer's stock is worth 40% more than its current value. The New York-based investment firm released a public letter Monday, saying it would vote against Tokyo-based Sumitomo Realty's senior management at the upcoming annual shareholders meeting if there's no meaningful progress made on improving its value.
Business Insider
30-05-2025
- Business
- Business Insider
Southwest CEO says changes like charging for seat bookings and checked bags will make it over $4 billion next year
Southwest Airlines expects to make over $4 billion from the array of changes it's introducing. That includes scrapping its signature policies of unassigned seating and the trademarked "Two bags fly free." At the Bernstein Strategic Decisions Conference on Thursday, CEO Bob Jordan said the airline expects an incremental EBIT contribution of $4.3 billion in 2026. "It's hugely impactful to the business and to our margins," he added. On Wednesday, Southwest started charging $35 for a first checked bag and $45 for a second one, although all loyalty members and credit card holders can get one for free. "Bag fees, credit exploration, [and] changes to the loyalty program" are expected to contribute $800 million, Jordan said. While changing the seating system is still "months away," it is expected to generate another $1.5 billion in 2026. Introducing assigned seating is designed to encourage passengers to pay to choose their seat and for premium options like extra legroom. "85% of the customers who won't choose us want assigned seating," Jordan said, adding it is also the biggest reason they don't fly with Southwest. The other $2 billion is split between cost-cutting measures and "base business changes," such as improving the airline's revenue management system. Budget airlines like Southwest have seen their profits tumble since the pandemic. Increased fuel and labor costs, plus domestic overcapacity, have made it harder to fill planes, while fliers are more interested in paying for premium options. As Jordan said on Thursday: "Let's answer the question of what do customers want? And they want segmentation of the cabin. They want a variety of product offerings. They want access to premium." Southwest has also faced pressure from the activist firm Elliott Investment Management. The new changes seem to be encouraging Wall Street. Southwest's share price has risen over 20% in the past month. Plus, Deutsche Bank analysts upgraded the stock from a Hold rating to a Buy on Thursday. "Southwest is in the middle of the largest transformation in company history and we are confident that its new board and management team will execute its transformation plan with considerable success," they wrote in a report.
