Belo board sets split in motion


Belo Corporation will complete its previously announced split into two companies (10/2/07 TVBR #192) next month, as the current board of directors last week approved details of the split.

Belo’s board has established the close of business on January 25, 2008 as the record date for shareholders and set a distribution ratio of 0.20 A.H. Belo shares for each share of Belo Corp. A.H. Belo will be the new company created to own the newspaper properties, while the television properties remain under the company’s current name. The distribution of A.H. Belo common stock is expected to occur on Friday, February 8th and will begin trading on the New York Stock Exchange with the ticker symbol “AHC” on Monday, February 11th. Belo Corp. will continue to trade as “BLC.” No fractional AHC shares will be distributed and cash will be paid in lieu of fractional shares. In other words, if you now own 100 Belo Corp. shares, after the distribution you will own 100 shares of Belo Corp. and 20 shares of A.H. Belo.

The distribution ratio of 0.20 means that there will be approximately 17.6 million shares of A.H. Belo Series A shares outstanding at the spin-off and approximately 2.9 million shares of super-voting A.H. Belo Series B shares (which do not trade publicly) outstanding.

"This is an exciting step in Belo’s strategic plan to enhance shareholder value by creating separate television and newspaper companies that will be very focused and responsive to changing industry dynamics," said Belo Chairman and CEO Robert Decherd. At the time of the split, he will become CEO of A.H. Belo and Dunia Shive will become CEO of Belo Corp.

Following the spin-off, Belo Corp. currently plans to pay an annual dividend of approximately 30 cents per share, paid quarterly, and A.H. Belo currently plans to pay an annual dividend of approximately one buck per share, paid quarterly, after adjusting for the 0.20 distribution ratio. The actual amount and timing of each dividend are subject to final determination by the boards of the two companies.

TVBR observation: What is the relative value of the two stocks? We’ll find out soon enough in the market. Belo said the NYSE has advised it that “when issued” trading in both post-split stocks will begin January 23rd, two business days before the record date. This could be a little confusing, since the “when issued” Belo Corp. shares will not include any right to receive A.H. Belo shares, while anyone selling Belo Corp. shares the “regular way” will also be selling their rights to the new A.H. Belo share distribution. In theory, the Belo Corp. shares trading the “regular way” on the NYSE should be valued about the same as one share of “when issued” Belo Corp. plus 20% of one share of “when issued” A.H. Belo. TVBR will be trading the “when issued” prices to see if that is indeed the case.