- Windstream (WIN -1.9%) plans to retain a 19.9% stake in its network asset REIT spinoff (set for 1H15), and distribute the other 80.1% to shareholders. The retained shares "will be sold opportunistically during a 12-month period following the spinoff, subject to market conditions, with the net proceeds used to retire debt."
- In tandem with the spinoff, Windstream plans to carry out 1:6 reverse split, and (to avoid a $600M-$800M tax liability) convert into an LLC. Shareholders will vote on the split at a Feb. 20 meeting.
- Windstream expects to cut its debt load by $4B through the spinoff. As previously announced, the telco's total dividend (covering both Windstream proper and the REIT) will be cut by $0.30 to $0.70/share (8% yield at current levels).
- The announcement follows last week's surprise resignation of CEO Jeff Gardner, and his replacement by REIT spinoff chief Tony Thomas. There has been speculation Gardner's resignation stemmed from REIT plan disagreements.
- Shares are lower on a day the S&P is up 1.3%.