ITT Sets Dec. 19 As Date for Breakup After Favorable Tax Ruling
Dec. 15, 1995
NEW YORK (AP) _ ITT Corp. set a date of Dec. 19 for its breakup into three separate publicly traded companies after receiving a favorable tax ruling on the spinoffs, chairman Rand V. Araskog announced Friday.
The $25 billion conglomerate announced in June it planned to divide itself into three parts _ an insurance company, an industrial products manufacturer and a casino, hotel and sports company.
Its shareholders approved the breakup in September, but the deal was contingent on obtaining a ruling from the Internal Revenue Service that the spinoffs would be tax free for shareholders.
Araskog said the company had received the ruling from the IRS and said that its board had set Dec. 19 as the date for distributing the new stock.
ITT shareholders will get one share in each new company for every share they own in ITT at the end of business on that date. The stock in the resulting three companies will begin trading the next day on the New York Stock Exchange.
New ITT Corp. will own the Sheraton and Cigna hotels, Caesars World casinos and ITT's stake in Madison Square Garden and the two New York professional sports teams that make the arena their home, basketball's Knicks and hockey's Rangers.
ITT Hartford Group Inc. will own the insurance businesses, and ITT Industries Inc. will get businesses that manufacture products like auto parts, electric motors and industrial pumps.
``We firmly believe that this new structure of three separate companies will allow the management of the companies to focus more intensively on their respective businesses and provide the flexibility for each company to grow in a manner suited for its industry,'' Araskog said in a statement.
In afternoon trading on the New York Stock Exchange, ITT was down $1.12 1/2 a share at $124. The stock closed at $109.25 a share the day before the plans for the breakup were announced June 13.