ConAgra’s plan to split business could see a new company spinoff or leave orbit, The Edge looks at the misunderstood facts for Lamb Weston stock

ConAgra expects that moving its headquarters and hundreds of employees to Chicago will cost it around $345 million, but should eventually produce $300 million in savings a year.

By Barbara Soderlin / World-Herald staff writer: As ConAgra Foods prepares to split itself into two, the company’s shareholders might be anticipating stock in a new, stand-alone firm that would come from a jettisoned frozen potato business. But those shareholders perhaps shouldn’t count on stock in a new company just yet.

Some business units that companies target for a so-called spinoff don’t ever actually make it to new lives as their own companies. Spinoffs gained a reputation for success several years ago but haven’t performed as well in the past year or two, said Jonathan Morgan, head of research at The Edge, a New Jersey firm studying spinoffs. Recently, so-called activist investors have been forcing spinoffs, he said. Those spinoffs might be good to goose the stock price of the parent company in the short term, but they might not be creating long-term value.

“Four of 10 spinoffs do not make any money, or give a negative return, in the first year,” he said. Another 40 percent, though, make more than 20 percent in the first year, he said, citing a 15-year study of global spinoffs that The Edge conducted with Deloitte. ConAgra investors trying to decide what to do with their future Lamb Weston stock will want to watch for details in coming months about how the company will be structured, including…

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