Adelphia Communications Corp. has set the wheels in motion for the planned
spinoff of its Adelphia Business Solutions Inc. subsidiary, announcing that it
has declared a stock dividend for all of its shares in the competitive
Adelphia said in a press release that it will distribute the dividend Jan. 11
to all holders of Adelphia class-A and class-B common stock of record as of 5
p.m. Jan. 8.
Holders of Adelphia class-A and class-B common stock will receive one-half
share of Adelphia Business Solutions, also known as ABIZ, for every Adelphia
share they own.
As of Dec. 21, Adelphia had approximately 212 million shares of common stock
outstanding and owned approximately 105 million shares of ABIZ common stock.
All of Adelphia's class-B common stock is owned by members of the family of
Adelphia chairman John Rigas. It is expected that after the spinoff, the Rigas
family will still retain majority voting control of ABIZ.
Adelphia announced in November that it would spin off the ABIZ unit -- a move
that would eliminate about $1.4 billion of ABIZ debt from its books.
Investors were pleased with the news, as it would significantly reduce the
cable company's leverage.
Adelphia stock rose more than 7 percent, or $1.96 per share, to $29.76 Wednesday due to the dividend, as well as consolidation
speculation surrounding last week's announcement that AT&T Broadband and
Comcast Corp. would merge in a $72 billion deal.
ABIZ stock was down 13 cents each to 46 cents per share Wednesday.