AT&T Sets Date for Wireless Spin-Off
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AT&T Corp.'s Board of Directors Friday voted to spin off AT&T Wireless as a separate independent company on July 9, 2001.
The company will redeem AT&T Wireless tracking shares and convert them into AT&T Wireless common stock on a one-for-one basis. The board also decided to issue a dividend of AT&T Wireless common stock to AT&T common stock shareholders of record on June 22. The dividend will be payable concurrently with the redemption.
The company said the special dividend will allow it to distribute the 1.16 billion shares of AT&T Wireless held by AT&T and allow it to complete the spin off. However, AT&T plans to hold onto about $3 billion of AT&T Wireless common stock for later disposition.
The company will distribute 1/3 of a share of AT&T Wireless for each AT&T common share outstanding, with the final ratio determined by the actual number of AT&T shares outstanding on the record date and the exact number of AT&T Wireless shares retained. AT&T said it currently has about 3.45 billion common shares outstanding.
The company said shareholders will receive whole shares of AT&T Wireless and cash payments for fractional shares. AT&T obtained a ruling from the IRS that the dividend to shareholders and the redemption of the tracking stock will qualify as tax-free for tax purposes, except in the case of cash exchanged for fractional shares.