JANA Partners Fail? Ashland Inc (ASH) Will Be Its Own Activist

JANA Partners Fail? Ashland Inc (ASH) Will Be Its Own Activist

JANA Partners Fail? Ashland Inc (ASH) Will Be Its Own Activist by Stock Pucker

A couple of years ago Jana Partners started pushing for a split up of the specialty chemicals company Ashland. The company, with underperforming chemical and adhesive businesses, was due for a change. Ashland is most famously known for its Valvoline motor oil.

Jana closed out its activist position in May, ending a two-year holding period that to a 58.6% return from the day it was announced via a 13D to the day he closed it via a 13D/A filing – locking in a 25% annualized return. But, now that Jana is gone, Ashland could be its own activist.

The key driver? A sale of its prized business, Valvoline. This business includes close to 1,000 oil change shops and makes up over a quarter of sales. This isn’t a fit for a chemicals company, but still a very profitable business. Buyers could include oil producers that want to better compete on the lubricant front – note that some of the big players have a presence in this space – including Exxon Mobil with Mobil engine oil and BP with Castrol.

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It could also spin the Valvoline business off. Management knows this asset is not a core part of the Ashland business and has said such. It’s just a matter of time at this point.

Older $ASH coverage – our 2013 piece entitled Jana Partners strikes again

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