Fri, Mar. 27, 3:27 PM
- In a dig at Third Point's Daniel Loeb, Dow Chemical (DOW +3.2%) CEO Andrew Liveris says his company's decisive move to shift out of the commodity chemicals business shows how “Dow continues to behave as our own best activist.”
- Dow's deal to sell its chlor-alkali business to Olin (OLN +18.2%) in exchange for $2B and a 50.5% stake in the smaller company will create the world’s largest chlorine producer with 5.7B tons/year of production and $1B in EBITDA.
- Citigroup’s P.J. Juvekar offers three reasons why the deal is good for shareholders: The chlor-alkali divestiture at 8x EBITDA is a great multiple for a commodity business, the Reverse Morris Trust deal makes it tax-free and a split-off will allow Dow to buy back its own shares efficiently - a similar move by PPG Industries was viewed very positively two years ago, and Dow will sell ethylene to OLN for 20 years and will receive an upfront payment of ~$400M.
- Dow may still get rid of its agricultural chemicals business, which does not have a lot in common with the rest of the business; with $7.3B in sales and almost $1B in EBITDA last year, the unit could be worth $10B.
- Juvekar says Axiall (AXLL +5%) also could benefit from the deal, seeing consolidation in the U.S. chlor-alkali industry as a positive, and OLN says it will look to optimize its expanded chlor-alkali asset base.
Mon, Mar. 23, 12:50 PM
- Olin (OLN -3.8%) is downgraded to Sell from Neutral with a $25 price target at UBS, which says the sum of the parts argument for OLN following the Vista Outdoor spin is less compelling the higher the stock moves, and the firm believes channel inventory declines have not bottomed yet.
- While OLN made positive comments about the potential for a chlorine/caustic recovery on its Q4 earnings call, the sentiment was not echoed by competitors Axiall (AXLL -1.2%) and Westlake (WLK +0.5%), and Dow Chemical (DOW +0.1%) is selling its operations partly because of depressed results.
- UBS views chlor-alkali as a shale gas advantaged business, where supply has increased in recent years, plus the natural gas advantage has declined with the fall in oil prices.
Tue, Mar. 3, 4:46 PM
Mon, Feb. 23, 11:28 AM
- Axiall (AXLL +0.3%) is reiterated with a Neutral rating by Citigroup's P.J. Juvecar, who says last week's news that the company might turn one of its divisions into an MLP has overshadowed weakness elsewhere in the stock.
- The analyst points to a number of unknowns yet to be resolved surrounding an MLP: the IRS has slowed down its issuance of PLRs for new asset types; the timing of an IRS decision and the time frame over which an MLP could be formed are uncertain; investor appetite is questionable since there are no chlor-alkali MLPs in existence.
- Given the reservations, Juvecar also cuts his 2015-17 earnings estimates, citing weakness in chlorovinyls and aromatics along with higher maintenance spending.
Thu, Feb. 19, 10:46 AM
- Axiall (AXLL +3.2%) says during its Q4 earnings conference call that it has been studying the possibility of creating a Chlor-Alkali MLP "as an opportunity to access low-cost capital and generate shareholder value," and has filed a ruling request with the IRS to determine if Chlor-Alkali qualifies.
- AXLL saysit would finalize a feasibility study about the creation of an MLP if it receives a favorable ruling.
- AXLL also says it will move its investment decision on a cracker to Q1 to allow time for additional analysis and clarity.
- Earlier: Axiall beats by $0.03, misses on revenue
Wed, Feb. 18, 10:39 PM
Tue, Feb. 17, 5:35 PM
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Mon, Jan. 5, 4:58 PM
- Gastar Exploration (NYSEMKT:GST) -8.4% in today's trade even as a state judge in West Virginia rejected the second of a pair of lawsuits by an Axiall (NYSE:AXLL) unit seeking to halt GST's fracking operations in the Marcellus Shale.
- GST said the judge agreed with it that the plaintiffs were legally precluded from retrying its claims in West Virginia after losing a nearly identical lawsuit in Pennsylvania in October.
- GST also said it recently completed 10 new wells in Marshall County that are now producing a combined gross rate of 28.7B cf of unprocessed natural gas and 3,300 bbl/day of condensate on a restricted basis.
- Topeka Capital cut its price target on GST to $6 from $8 even while saying the company is in good shape to land within its Q4 2014 production guidance of 66M-72M cfe/day and that the new wells should contribute to strong momentum in Q1 2015 (Briefing.com).
Nov. 18, 2014, 3:05 PM
Nov. 5, 2014, 12:04 AM
Nov. 3, 2014, 5:35 PM
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Sep. 25, 2014, 2:08 PM
- Dow Chemical (DOW -0.4%) has begun the process of selling its epoxy and chlorine businesses, and has hired Goldman Sachs and Barclays to manage the sale, Reuters reports.
- The combined epoxy and chlorine businesses have annual EBITDA of close to $500M, and initial estimates place their combined value at $3.5B-$4B.
- Logical buyers, according to the report, could include companies in the sector such as Axiall (AXLL -2.3%) and Westlake Chemical (WLK -2.2%), as well as P-E firms experienced in chemicals such as Apollo Global (APO -1.5%).
Aug. 13, 2014, 5:40 PM
Aug. 5, 2014, 5:58 PM
Aug. 5, 2014, 12:45 PM
- Cautious overall on small caps (NYSEARCA:IWM) due to valuation concerns, Goldman's David Kostin nevertheless has a list of 25 names with market caps less than $4B which could offer at least 25% upside to his firm's price target over the next year.
- The list skews towards Consumer Discretionary - Lumber Lidquidators (LL +2.1%), Office Depot (ODP -2.4%), RetailMeNot (SALE -26.1%), Ryland (RYL +0.5%), Steven Madden (SHOO +2.7%), Vitamin Shoppe (VSI -8.2%) - and Tech - Universal Display (OLED -0.2%), Qlik Technologies (QLIK -1.6%), Proofpoint (PFPT -1.5%), Polycom (PLCM +0.2%), Nimble Storage (NMBL -0.3%), Marketo (MKTO +1.1%), Infinera (INFN +1.1%), Cornerstone Ondemand (CSOD -0.9%), GT Advanced Technology (GTAT +5.7%).
- Also included are Health Care names: Agios Pharmaceuticals (AGIO -1.1%), NPS Pharma (NPSP +0.7%), NuVasive (NUVA -1.8%), Synageva (GEVA -1.6%); Consumer Staples: Darling Ingredients (DAR -0.8%); Materials: Axiall (AXLL -1%), Boise Cascade (BCC -0.9%); Industrials: Granite Construction (GVA +0.7%), Financials: MGIC Investment (MTG +1.2%), Radian (RDN +1.7%).
Aug. 4, 2014, 5:35 PM
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