Time Warner Inc. (TWX) has approved the spin-off of Time Inc. for May 23, the company said in a release. TWX shares ease in midday trading Friday.
The Time Warner board of directors has approved the final distribution ratio and declared a pro rata dividend of the outstanding shares of Time Inc. common stock, which will result in the complete legal and structural separation of the two companies. The distribution is subject to the satisfaction or waiver of certain conditions.
On the distribution date of June 6, 2014, Time Warner shareholders of record as of 5:00 p.m. on May 23, 2014, the record date for the distribution, will receive one share of Time Inc. common stock for every eight shares of Time Warner common stock they hold on the record date. Time’s “when-issued” trading is set for May 26.
Fractional shares of Time Inc. common stock will not be distributed to Time Warner shareholders. Instead, the fractional shares of Time Inc. common stock will be aggregated and sold in the open market, with the net proceeds distributed pro rata in cash payments to the Time Warner shareholders who would otherwise receive a fractional share of Time Inc. common stock.
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