Cookson looks at electronics spin-off Cookson, the UK industrial materials company, is considering splitting itself in two. Analysts have long speculated that such a move could benefit shareholders in the company, which trades at a discount to its sector, and derives about three-fifths of its £2.8bn revenues from its ceramics business, and most of the remainder from its electronics division. IN Industrial Goods Cookson declined to comment on a report in the Sunday Times suggesting that it planned to spin off the electronics division, which makes chemicals and pastes used in the production of circuit boards, and float it as a standalone company on the London Stock Exchange. However, people close to the situation said that the company, and its recently-appointed adviser, the investment bank Rothschild, were considering a demerger as part of a review of strategic options. Robert Machell, a partner at Governance for Owners, an activist investor which has a 4 per cent stake in Cookson, said his fund had been in dialogue with Cookson's management over the issue for a couple of years and that such a move would "enhance shareholder value." We would certainly support a demerger. It is not immediately obvious that the businesses fit together - there are no obvious synergies. We think that combined value of the separate businesses would be higher than if they were kept together," he said. Cookson's largest shareholder is Cevian, the activist European hedge fund chaired by Lord Myners, which is known to have pushed for demergers at other companies in which it has invested. Cevian declined to comment. However, the hedge fund has a strategy of taking substantial stakes in publicly listed European companies which it sees as undervalued, before trying to boost their worth through activist ownership. Since November, it has built up an 18 per cent stake in Cookson. The engineering company's shares have rallied around 60 per cent in that period, and closed at £6.91 on Friday, valuing Cookson at £1.91bn, but leaving it trading at a discount of about 20 per cent to its peers. In February, Cookson said that it had agreed to sell its US precious metals business to Richline Group, a subsidiary of Berkshire Hathaway. The company's chief executive, Nick Salmon, indicated at the time that he would listen to offers for the European remainder of Cookson's precious metals operations, the sale of which would leave Cookson with just its electronics and ceramics divisions. In a note published in February, Andrew Carter, a capital goods analyst at Royal Bank of Canada, argued that as separate businesses the two divisions would be better placed to participate in industry consolidation given their smaller sizes and greater focus.