Tyco Chief Executive Officer Dennis Kozlowski told investors Tuesday the breakup wasn't related to any accounting problems.
Tyco considered a breakup for years but didn't proceed because the various business units were too small, he said.
With a slower US economy causing companies to hold off on stock and bond sales as well as mergers and divestitures, investment banks are likely to have to share business they might have shunned in the past, said Prudential's Trone.
"Because there is less business, there will be more effort," he said. The banks want Tyco's business and the fees that it generates, as well as the future fees the four new companies will offer. Kozlowski said he expects the new companies to be "Tyco-esque," as in "acquisitive."
Tyco's current plans may yet change. The company has reversed course before, buying back TyCom from shareholders in December and generating fees for JP Morgan and Goldman. Some investors speculate that some of the planned IPOs may not happen.
Kozlowski said offers for any of the businesses that seemed likely to bring more money to shareholders than IPOs would be taken to Tyco's board.
One target mentioned by investors is Tyco Capital, which was known as CIT Group Inc until September 2001, when Tyco bought it.
The possible buyer: Tyco's larger rival, General Electric Co.
General Electric, which owns GE Capital Corp, the biggest non-bank financial company, competed with Tyco for CIT and may still be interested, according to bankers and analysts.
"It's just premature to even talk about it," said General Electric Chief Executive Jeff Immelt, in an interview. "I'll evaluate what actions they're taking and see where we'll go."
Whether or not investors benefit from Tyco's breakup, Goldman and Wall Street won't suffer.
"We are very confident that the investment banking fees paid by Tyco will be favorable to Goldman Sachs shareholders," Hintz wrote in a report.
"Bankers have made out royally with respect to Tyco," said Front.
"It's been a bonanza."
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