Source: First Data
First Data Corp. (NYSE:FDC) today reported that its Board of Directors has approved and set a record date of September 22, 2006, for the proposed tax-free spin-off of Western Union.
The Board declared a dividend of one share of common stock of Western Union for each share of First Data common stock held.
The distribution of Western Union shares is expected to occur on September 29, 2006, to holders of First Data common stock of record as of September 22, 2006. The distribution is conditioned upon the Securities and Exchange Commission (SEC) declaring effective the Registration Statement on Form 10 for Western Union common stock, as well as other conditions. The First Data Board has reserved the right to withdraw its declaration of the dividend at any time prior to the distribution.
First Data has received a favorable tax ruling from the Internal Revenue Service with respect to the spin-off.
Ric Duques, chairman and chief executive officer, stated: "We have made tremendous progress in the past eight months and I am very pleased to now be reaching the final phase of the Western Union spin-off. As we outlined in January, the separation of Western Union from First Data will provide a better structure for each company to pursue the most appropriate long-term growth opportunities and business strategies by allowing each company to focus on its own distinct businesses, opportunities and markets. First Data will continue to provide business customers with leading, innovative electronic commerce and payment solutions, while Western Union will build on its leading position as the trusted source for consumers around the world to transfer money and pay bills rapidly, reliably and conveniently. We pursued this transaction in the best, long-term interests of our clients, customers and shareholders. I am proud of this shared accomplishment and want to extend my deep appreciation to all of our employees whose tireless efforts and commitment have made this monumental achievement a reality."
Christina Gold, chief executive officer of Western Union, said: "We are delighted to have reached this milestone in the process of creating an independent Western Union. This is an important achievement for both First Data and Western Union, and we continue to be excited about the prospects for our separate organizations in the future. This is a remarkable moment in Western Union's history. As an independent organization, Western Union will be able to sharpen our focus on strengthening our brand and serving our consumers, and the investment community will be able to evaluate our stock separately from First Data. Let me take this opportunity to thank the entire Western Union and First Data teams for the extraordinary efforts they have made to get us to this point, as we prepare for the next chapter in our long and proud history."
First Data expects that a "when issued" public market for Western Union common stock will begin on September 20, 2006. Western Union is expected to trade on the New York Stock Exchange (NYSE) under the trading symbol "WU."
First Data stockholders who sell their shares of First Data common stock in the regular way market (i.e., the normal trading market on the NYSE under the symbol "FDC") after the record date and on or prior to the distribution date will be selling their right to receive shares of Western Union common stock in connection with the spin-off. Investors are encouraged to consult with their financial advisors regarding the specific implications of selling their shares of First Data common stock on or before the distribution date.
First Data currently has approximately 765 million shares of common stock issued and outstanding. Based on the distribution ratio, First Data expects to distribute approximately 765 million shares of Western Union common stock in connection with the spin-off. The actual number of shares of Western Union common stock to be distributed will be determined based on the number of shares of First Data common stock outstanding on the record date. Holders of First Data common stock will not be required to pay any cash or other consideration for the Western Union shares they receive.