Babcock & Wilcox (BWC) has set the dates for its spin-off. Those who own the stock on June 18th will get their spin-off shares on June 30th:
"As a result of the spin-off, Company stockholders can expect to receive as a dividend one share of New B&W common stock for every two shares of the Company’s common stock held as of 5:00 p.m. EST on June 18, 2015, the record date. The distribution of New B&W shares is expected to occur on June 30, 2015 and is expected to be tax-free. "
Shareholders will then own two separately traded stocks. The stock with the “BWXT” ticker will be the government business. The stock with the “BW” ticker will be the power plant business.
The press release gives an accurate description of what “BWXT” will be:
“BWXT is the sole manufacturer of naval nuclear reactors for submarines and aircraft carriers; provides nuclear fuel to the U.S. government; provides technical, management and site services to aid governments in the operation of complex facilities and environmental remediation activities; and supplies precision manufactured components and services for the commercial nuclear power industry.”
It gives a poor description of what “BW” will be:
“New B&W will continue to be a leader in clean energy and environmental technologies for the power and industrial sectors. New B&W also will provide one of the most comprehensive platforms of aftermarket services to a large global installed base of power generation facilities.”
BW is really the boiler business. They build boilers and related equipment for power plants. Some of those plants are clean energy plants – but a great many are actually coal power plants.
Babcock & Wilcox was a Singular Diligence stock pick. I own the stock personally. Quan does not. I plan to keep both my “BWXT” shares and “BW” shares indefinitely.
I’ll let you know if that changes.