The spin-off has been heralded as the tool of the future - the means to prepare sprawling European companies for the next century. But is it as successful as investment bankers and their clients would have us believe? Not according to Paul Gibbs, an equity analyst at JP Morgan in London.
He does not reject the importance of large companies spinning off subsidiaries. Indeed, part of his research concentrates on generating scores for corporate clarity: "Any company which scores less than 70% is a prime candidate for restructuring of some sort or other, and there are plenty of those around," says Gibbs. "For those lower down the list, the spin-off could be a useful tool." According to his clarity figures, one-third of the UK's top 125 companies by market capitalization fall into this category - and the UK is usually held up to be the most advanced country in Europe as...
