Posted by: Alex Chory
In reply to: bartermania who wrote msg# 1435 Date:1/16/2006 6:43:17 AM
Post #of 1440
TYCO, what a complete waste of shareholder money,
no wonder stockholders are dumping it, TYCO just giving
money away to selected top key personnel, retention plan is to pay 2.5 x's their base salary if they stay to the completion of spinoff, among other things, get in line for your handout.
I know a couple friends that work for tyco, and believe
me, they get treated well and hardly work......
what's in your wallet?
stay tuned on this one, you just might see some class action suits developing here...
Scandal-plagued Tyco International to split into three companies
Friday Jan 13 2006 18:35:22 EST
TRENTON, N.J., Jan 13, 2006 (The Canadian Press via COMTEX) --
Tyco International Ltd. (NYSE: TYC), still recovering from scandals that saw its longtime former chief executive sentenced to prison, said Friday it plans to split into three public companies.
Carving Tyco's electronics and health care businesses from its remaining operations was expected, but Wall Street still punished the company on news the breakup would reduce profits, cost $1 billion US and take a year to complete.
Tyco, best known for its ADT home alarm systems, warned its first quarter and full-year 2006 earnings from continuing operations would be lower than expected.
Its shares tumbled $3.19, or 10.5 per cent, to close at $27.12 in trading on the New York Stock Exchange.
Tyco, which has its operational offices in West Windsor, said the breakup followed an extensive strategic review and will strengthen the businesses. Operations remaining in the core company include security and fire-protection services.
"We believe that separation is a logical next step in Tyco's evolution," said chairman and chief executive Ed Breen in a morning conference call. He said the board concluded the current structure was inhibiting growth possibilities of the health care and electronics businesses, both leaders in their respective fields.
In a move expected to be completed in the first quarter of 2007, Tyco will separate the companies through issuing tax-free stock dividends to shareholders, who will own dividend-producing stock in all three companies.
Each of the new companies, still based in Bermuda, will be governed by an independent board of directors who will continue to refine those portfolios with possible selloffs or acquisitions, Breen said.
Tyco has been recovering from accounting scandals that resulted in the convictions in June of former CEO and longtime leader Dennis Kozlowski and former chief financial officer Mark Swartz, who were sentenced to prison last year for grand larceny, conspiracy, securities fraud and falsifying business records. They are appealing their convictions.
"Over the past three years, Tyco has come a long way," Breen said. "We have a strong and independent board, a rebuilt management team, outstanding corporate governance rankings and an operational culture that puts growth and operating excellence at the top of the management agenda."
In November, the company said it might split up its businesses to boost the value of the stock, and there had been reports this week that it was close to a decision. It also considered a breakup four years ago.
Breen said Friday the board considered a range of options, including selling certain businesses, and separating only one of the operations.
Tyco now expects first-quarter earnings, excluding one-time items, to be about 38 cents per share from continuing operations, down from its prior outlook of 40 cents to 42 cents per share.
The firm lowered its full-year 2006 earnings forecast to a range of $1.85 to $1.92 per share from continuing operations, compared with a forecast in November of $1.88 to $2.06. Full-year earnings in 2005 were $1.51 per share.
The $1 billion in anticipated costs are mainly for tax and debt refinancing, the company said.
Analysts expect a profit of 42 cents per share for the quarter, and $2.01 per share for the year, according to a Thomson Financial survey.
Some analysts questioned whether a divided Tyco will succeed as executives hope.
Forecasting tumultuous times ahead, Prudential Equity Group analyst Nicholas Heymann said the segment of Tyco's growth not tied to new acquisitions or currency fluctuations has been flat.
Heymann said the electronics business is subject to cyclical ups and downs, while ADT soon will begin facing competition from cable TV providers offering less expensive home-video monitoring.