Boston, MA 10/13/2014 (wallstreetpr) – Compuware Corporation (NASDAQ:CPWR) disclosed that its Board of Directors has given its approval for the distribution of its entire equity stake in Covisint Corp (NASDAQ:COVS) to its shareholders. It is also applicable to the holders of its restricted stock units. The company said that the distribution would be effective on October 31. After the distribution is completed, the company would not have any interest in Covisint.
Approximate Distribution Ratio
The company said that it has approximately 31.38 million shares of Covisint Corp (NASDAQ:COVS) and fixed October 31 as the distribution date, its statement revealed. It indicated that the distribution would be on a pro rata dividend on its shares and delivered restricted stocks of outstanding as on October 20, which would be the record date.
Compuware Corporation (NASDAQ:CPWR) said that its shareholders would get 0.1402 share of Covisint share in the distribution for every share of Compuware as at the close of the record date. The restricted stock holders would also get the same ratio of shares for their holding as at the close of the record date.
The company indicated that the actual distribution ratio would depend on the actual number of shares outstanding as at the close of the record date under the restricted outstanding shares. It clarified that fractional shares of Covisint Corp (NASDAQ:COVS) would not be distributed to its shareholders and restricted stock holders. It would consolidate the fractional shares and sell it in the open market. The net proceeds from the sale would be distributed on a pro rata basis to its shareholders through cash payments. It was applicable to shareholders who would get fractional shares.
Taxable
Compuware Corporation (NASDAQ:CPWR) said that the spin-off would be taxable in the U.S. Therefore, it said that the Covisint share value and the amount received if any in lieu of fractional shares, would be taxable as applicable. The company said that starting from October 16; its stock would be ex-dividend.
After the spin-off, Compuware Corporation (NASDAQ:CPWR) share would continue to trade in Nasdaq under the same ticker while Covisint would be traded under its existing symbol.
