Jump to content

Reverse Morris Trust Returns


Recommended Posts

Based on a discussion from the DISCK thread on the impact of the Reverse Morris Trust overhang on DISCK's share price, I wanted to create a topic about it, and see if other have looked at this too. Do Reverse Morris Trusts typically have similar return profiles to plain vanilla spin-offs? If not, what are the characteristics that make them different?


Here are some recent RMT's with completion dates and returns since completion that I found through the magic of Google.


Covetrus - Schein RMT with private vet biz (Feb. 2019) -49% + 0% yield

LMT and LE (Aug. 2016) 125% + 1.5% dividend yield

GE and WAB (Feb. 2019) 24% + a 0.5% dividend yield

ETM and CBS Radio (Nov. 2017) -71% + 0% yield

Link to comment
Share on other sites

6 hours ago, dwy000 said:

can you frame it a little more?  Are you referring to short term movement due to a re-juggling of the shareholder base or are you referring to the long term returns of spinouts in general using this structure?

I think about things in terms of years…so I’m most interested in returns 3-year post-close, but others may have different yardsticks.

Link to comment
Share on other sites

1 hour ago, Broeb22 said:

IFF has underperformed the S&P by 30 points since announcement and flat since the close in February…

After deal close Yes.  I think IFF was held down because of the RMT transaction in 2020 as some people were likely long DD and short IFF.  There was a nice pop in early 2021 when the deal was about to close.  I have sold since.  But if you swapped DD shares for IFF, that was a nice outcome.  I tendered 40% and was pro-rated about half.    

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Create New...