Activist Hedge Fund Alden Global Pushing for Visteon Corp Breakup

Alden Global Capital, the activist hedge fund, is leading a push to breakup Visteon Corp (VC), the former parts affiliate for Ford Motor Co (F), reports Reuters.

Alden Global Pushed for Restructuring Specialists to be Elected to the Visteon Board

The activist hedge fund nominated restructuring specialists Harry Wilson and Kevin Dowd to the company’s board in August. The pair have since been instrumental in several of Visteon Corp’s biggest decisions, like “hiring Goldman Sachs as a financial adviser and replacing the company’s chief financial officer.” According to Reuters, “They also took on key corporate strategy roles themselves on behalf of the 10-member board.”Visteon has four separate divisions – climate control, interiors, electronics and lighting. It also has large stakes in other businesses, like Yanfeng and Halla, which “makes air conditioning and heating systems for vehicles and counts Hyundai Motor Co and Kia Motors Corp as its major customers.”

Visteon Corp

The Visteon Board is Considering Many Different Options

“The board, betting on the view that Visteon has more value in pieces than as a whole, is now examining various options to break up the company,” reports Reuters. A spokesperson for Visteon said, “The board is unified in its desire to have Visteon succeed and is aligned with the management in its commitment to deliver to shareholders.” The thing is that no one is exactly clear what that will mean for Visteon operations. On one hand, board members are considering “selling or spinning off Visteon’s 70 percent stake in Halla, as well as its 50 percent stake in Yanfeng,” while “Another option would see Visteon sell most of its assets except Halla to become a pure-play climate control supplier with strong exposure to fast-growing South Korean automakers.”