Prepping for 2001

All was quiet on the IPO front last week. However, there were some signs
that – yes – the IPO market will make a comeback next year.

Evidence came from Conexant
, a leading chip maker. You see, it is planning a spin-off.
Although, the new entity does not have an official name; rather, it is being
referred to as the nondescript “Spinco.”

Basically, the parent company will focus on chips for cell phones, consumer
electronics and modems. As for Spinco, it will sell the hot stuff. There
are three main units: wide area networks transport area (chips and software
for routers, hubs and switches); multi-service access area (chips and
software for remote access concentration equipment); and broadband access
(chips for central office equipment).

But like other emerging companies, Spinco is generating losses. The company
lost $232.8 million (for the year ended September 30) on sales of $579.2
million.

The IPO is expected to launch in January. The co-underwriters include CS
First Boston and Morgan Stanley. No price range has been set.

Also, expect a spin-off from Liberty Media, which is currently a division of
AT&T . There has been no
secret that John Malone (who engineered Liberty Media) is a huge critic of
Ma Bell. Then again, after Ma Bell spent several years buying companies, it
is now planning to sell them off. And, in the process, Ma Bell’s stock
price has tanked. Malone is the biggest shareholder of Ma Bell.

But perhaps the big advantage for Liberty Media is that it will be, well,
liberated to make more aggressive partnerships and acquisitions. For
example, Liberty Media will be able to make an investment in News Corp’s Sky
Global satellite service.

The terms of the spin-off have yet to be announced. Although, it is
expected to happen in January.

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