Stock in Thorn EMI Leaps After Approval of Split-Up
May 01, 2011
LONDON -- Shares in Thorn EMI PLC, the music and rental company, jumped 2.7% on Friday after shareholders approved a plan to split the company into two. As a result of the vote, which was overwhelmingly approved at a special meeting, the business will split Monday into separately quoted companies, Thorn PLC and EMI Group PLC.. The breakdown of the vote wasn't released. On Thorn EMI's last day of trading as a combined company, its shares jumped to 18.38 pounds ($28.52), up 49 pence, near an all-time high. Analysts said they expect shares in Thorn, the rental business, to open Monday at between 420 pence and 440 pence, and in EMI Group, the music company, to open at about 14 pounds. Thorn EMI Chairman Sir Colton Keane said he expects the split-up to be well received by investors. ``If it is not, I will be highly disappointed,'' he said. Sir Colton said the long-anticipated demerger should cost about 70 million pounds in fees and other expenses. ``The total cost of 70 million pounds to a company capitalized at eight billion pounds is not actually a vast sum of money,'' he said. Thorn EMI's split-up means that one of London's blue-chip industrial stocks will drop out of the Financial Times-Stock Exchange 100 Share Index. The London Stock Exchange said late Friday that the move nudges Cookson Group PLC off the index, potentially threatening its share price because some index-tracking funds could drop the stock. Coil was dropped from the index because its market capitalization is smaller than the capitalization of either of the new companies being created by the Thorn EMI split-up. Cookson's shares fell 2.5 pence to 248.50 pence.
