U.S. Cellular Corp.’s parent company Telephone and Data Systems Inc. reported its board of directors has approved a distribution of a stock dividend for each outstanding common share and series A common share owned. The dividend is in the form of one special common share that is substantially identical in rights, powers and limitations to common shares, except that they are not voted in matters other than election of certain directors.
TDS added that the dividend would take place May 13 to shareholders of record April 29 and would increase the number of special shares from 20 million shares to 165 million shares.
TDS said the dividend would provide the company with greater strategic and financial flexibility and a more flexible capital structure, as well as help facilitate acquisitions and raise funds in the capital markets.
In addition, TDS said it might sometime in the future make an offer to issue special common shares in exchange for the remaining 18 percent of U.S. Cellular that it does not already own. Analysts have questioned TDS’ plans for U.S. Cellular in recent months, noting that a run-up in U.S. Cellular’s stock price has propelled the wireless carrier’s market capitalization to more than $4 billion, which is just below TDS’ $4.9 billion market capitalization.
TDS’ shares were trading up slightly early Friday at $85.38 per share, while U.S. Cellular’s stock was trading up 8 percent at $46.65 per share.
