Dun & Bradstreet Plans to Spin Off Moody’s

Dun & Bradstreet Corp. said it will spin off its highly profitable bond-rating unit, Moody’s Investors Service, in an attempt to boost value for holders of its flagging shares. The company did not give details, but is likely to allocate shares in a new publicly traded Moody’s company to existing shareholders of Dun & Bradstreet Corp. in the hope of reaping a better market valuation for the fast-growing unit. The news sent Dun & Bradstreet shares up $2.69 to close at $29.75 on the New York Stock Exchange. The shares had plunged to around $25 in August after a profit warning on sluggish U.S. sales. The company’s profit fell in the third quarter, dragged down by its publishing operations. Henry Berghoef, senior analyst at Harris Investments, Dun & Bradstreet’s largest shareholder with a stake of more than 12%, said the plan is a positive move, but he wants to see more details. “One major issue that needs to be resolved is the leadership for both units, in particular the D&B; operating unit,” he said. D&B; is looking for a new permanent chief executive after Volney Taylor resigned in October. Berghoef and other shareholders protested Dun & Bradstreet’s poor performance this summer, advocating a complete sale of the company. Dun & Bradstreet hired investment bank Goldman Sachs to analyze and develop a structure for the transaction, which is subject to favorable tax rulings from the Internal Revenue Service and final board approval.