A Citigroup analyst said the structure of Halliburton Co.'s plan to split off its remaining interest in KBR Inc. should offset any potential earnings dilution.
Halliburton on Monday said it approved a plan to split off its remaining interest in KBR through a stock offering. Under the proposal, Halliburton will offer its about 135.6 million shares of KBR common stock to its shareholders in exchange for shares of Halliburton common stock at an exchange ratio to be determined by a specific formula.
Citigroup analyst Geoff Kieburtz in a Monday client note said the transaction will result in an effective buyback of Halliburton shares, which will offset the loss of the KBR earnings contribution.
"We strongly reiterate our recommendation to buy Halliburton ahead of the split off and maintain our $48 target," wrote Kieburtz.
AP
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