Motorola (NYSE:MOT) shareholders will vote on a reverse sock split ahead of the planned separation of the company into two new, publicly traded entities.
The split is an effort to boost the two companies' share prices ahead of the spinoff. According to the plan outlined by Motorola, shareholders will get one share for every three to seven share they currently own, though the exact ratio will be decided later by Motorola's board. Shareholders will vote on the move Nov. 29.
The reverse stock split will affect the shares of Motorola Solutions, which will be led by Motorola co-CEO Greg Brown and house Motorola's enterprise mobility and legacy businesses. Motorola sold off its wireless networks business to Nokia Siemens Networks in July for $1.2 billion. New shares will be issued for Motorola Mobility, which will be led by Motorola co-CEO Sanjay Jha and include the company's handset unit an its set-top box division.
Motorola said in a regulatory filing in August that it will give $3.5 billion to Motorola Mobility. In an interview at the time with Bloomberg, Marc Rothman, the CFO of Motorola Mobility, said the cash will be used to operate and expand the businesses and help pay for acquisitions. The new company might make small software acquisitions, he added.
Motorola, which will give stock in the new company to current shareholders, is buying back most of its debt in preparation for the move. Jha said in July that when Motorola Mobility launches it will have no debt.
For more:
- see this Bloomberg article
- see this Dow Jones Newswires article (sub. req.)
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