Time Warner Inc. (TWX) and Time Warner Cable (TWC) this week agreed on the terms of the companies’ separation.
Parent company Time Warner Inc. will distribute all of the cable stock it owns to shareholders, in the form of a special dividend of $10.27 per share. The distribution should be completed by the end of March.
Of the dividend, 40 percent will be taxable and 60 percent will be considered a return of capital, according to a research note from investment bank Jefferies.
Time Warner Inc. long has wanted to separate its cable and media businesses. But it faced unnecessary pushbacks from the Kevin Martin-run FCC, Commission Jonathan Adelstein told C-SPAN last week, a situation Adelstein expects to be reversed and corrected.
"The previous chairman felt he was going to take unrelated issues like a la carte and try to force them into what would otherwise be a rubber stamp,” Adelstein told C-SPAN. “Now, I'm not one to rubber stamp media transactions, but this was deconsolidation. This was a cable company dealing with a lot of the problems Congress was concerned about with integrated cable companies that had programming and distribution."
Both Time Warner Inc. and Time Warner Cable stocks were down in late morning trading on Wednesday.
