RESTON, Va.—Sprint Nextel Corp. said it expects to complete the spinoff of its local telecom business, dubbed Embarq Corp., on May 17.
That day, Sprint Nextel expects to distribute to its shareholders all of Embarq’s shares as a stock dividend, based on a ratio of one Embarq common stock share for every 20 shares of Sprint Nextel voting and non-voting common stock. Cash will be distributed instead of fractional shares, and no physical stock certificates will be issued. The distribution will go to shareholders of record at of the close of business May 8.
The carrier noted that it received a ruling from the Internal Revenue Service that the stock distribution will not be taxable, although the cash paid in lieu of fractional shares almost certainly will be. The stock distribution still must receive final approval from the Securities and Exchange Commission and the New York Stock Exchange.
Embarq, which is expected to be listed on the NYSE under the ticker symbol EQ, will provide local and long-distance voice and data services, including high-speed Internet access, with more than 7 million access lines. The new company also has indicated that it will form a mobile virtual network operator to offer wireless services.
