Boston, MA 06/11/2014 (wallstreetpr) – B/E Aerospace Inc (NASDAQ:BEAV) has announced that it will split into two independent publicly traded entities. The company would not the auction the assets. The step was the result of the investor push. The newly formed companies will have their own management and board of directors. The restructuring of B/E Aerospace is expected to complete in the first half of 2015.
The Two Independent Entities
B/E Aerospace Inc (NASDAQ:BEAV) will split into two companies with exposure to the different industries. The first company will look after the aircraft interiors while the second will look after the distribution, logistics and technical services. The company will follow the regular monitoring to explore new strategic options in respect to the sales of the units. The time to complete the process will not allow the investors to take the profit arising out of splitting of the company. Investors were expecting a quick sale of the company or its parts. It will moreover lead to squeezing of liquidity and will also increase the costs.
The Impact On The Share Price
The B/E Aerospace Inc (NASDAQ:BEAV)’s shares are having a tough time from last some days. The investors are selling off the shares since May on the anticipation of the company’s sale or breakup. The announcement of splitting in two companies has finally confirmed the rumors. Initially, it was looking for acquisitions but then the activist investors called for the split that will result in the maximizing of the shareholder returns.
The Expectations
The analysts are not expecting a real big value out of the splitting of the company. They expect a lower valuation especially from the services business. Also, the probability of sale of any of the newly formed company remains minimal. From an investor’s perspective, the offer doesn’t seem attractive and fruitful. For now, investors should stay away from the B/E Aerospace Inc (NASDAQ:BEAV)’s stocks.
