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Company ABC has recently announced its intention to sell a 20% stake in two of its subsidiaries to the public, companies MNO and XYZ. In
Company ABC has recently announced its intention to sell a 20% stake in two of its subsidiaries to the public, companies MNO and XYZ. In the case of MNO, ABC also announced its intention to distribute its remaining 80% interest directly to shareholders at some later date in July.
- In February, ABC sold the 20% stake in MNO.
- In March, ABC sold the 20% stake in XYZ for $27/share.
- In June, MNOs stock was trading at approximately $37/share, XYZs stock was trading around $29/share, and ABCs share price stood at about $54.
- Assume ABC owns 136 million shares of MNO after the partial spinoff and there are 340 million total ABC shares outstanding. Also assume ABC owns 340 million shares of XYZ after the partial spinoff. Given this information, what is the implied share price of Company ABC on its own?
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