Internet-based consumer products and services provider United Online (NASDAQ: UNTD ) announced on Friday that it's extending for one month its previously announced separation of its FTD subsidiary. The online retailer had previously said it was targeting Oct. 1 as the spinoff date for the floral delivery service, but it has now pushed the date back to Nov. 1.
Saying the company is still committed to the spinoff, United Online Chairman, President, and CEO Mark R. Goldston said: "We continue to believe that the tax-free spinoff of FTD will unlock value for the benefit of our stockholders and provide significant operational and strategic flexibility for both FTD and United Online, better position them to capitalize on their well-recognized brands, and enhance long-term stockholder value."
Under the terms of the separation previously announced, for every five shares of United Online stock that's held on the record date of the spinoff, the shareholder will received one share of FTD's common stock. The record date is still to be determined.
In addition, United Online expects to implement a 1-for-7 reverse stock split of shares of its own common stock immediately before the spinoff of FTD. It offers the example that for every 35 shares of United Online common stock owned, the shareholder would hold seven shares of FTD stock and five shares of United Online stock immediately after the spinoff and reverse stock split are completed.
While the spinoff is expected to be tax-free, a letter from the IRS still needs to be received acknowledging as much before the deal can be completed, along with the usual and customary requirements to which the spinoff is subject.