Breaking Up Celanese Could Create Value, But It's Not The Only Way

In the get-rich quick (or at least “quicker”) world of institutional investing, firms often push companies toward actions that benefit the institutions most in the short term, including steps like cutting R&D, cutting capex, slashing headcount, leveraging the business to buy shares, and most recently, “de-conglomerating” businesses. In the particular case of Celanese (CE), though, the idea of break-up has been in play for some time, as the Street hasn’t historically given full credit for the value of this highly-integrated industrial chemical company.

I’m ambivalent about a break-up. I believe a series of deals could reap about $130 to $135/share in total value for shareholders, with no ongoing operational risk (take your money and go home). On the other hand, continuing to run Celanese with the same basic operating approach would possibly generate greater long-term gains for patient shareholders who want to stick around.

Read the full article here:
Breaking Up Celanese Could Create Value, But It's Not The Only Way