Time Warner and AOL today announced that December 9 would be the official spin-off day of AOL, with Time Warner's Board of Directors giving their approval on a stock dividend and distribution plan for shareholders.
Those who hold shares of Time Warner as of 5 p.m. November 27 will receive 1 share of AOL common stock for every 11 shares of Time Warner common stock they hold. No action or payment is required of Time Warner shareholders and the spin-off has been structured in a way that the dividend qualifies as tax-free.
As for trading those shares, the companies explained it this way:
Shares of Time Warner common stock will continue to trade “regular way” on the New York Stock Exchange (“NYSE”) under the symbol “TWX” through the distribution date of December 9, 2009, and thereafter. Any holders of shares of Time Warner common stock who sell Time Warner shares regular way on or before December 9, 2009, will also be selling their right to receive shares of AOL common stock. Investors are encouraged to consult with their financial advisers regarding the specific implications of buying or selling Time Warner common stock on or before the distribution date.
AOL common stock will begin trading on a “when-issued” basis on the NYSE under the symbol “AOL WI” beginning on November 24, 2009. On December 10, 2009, when-issued trading of AOL common stock will end and “regular-way” trading under the symbol “AOL” will begin.
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