indices effective for spin-offs
whose ex- distribution date is on or after October 1, 2015.
We compare these "sponsored" spin-offs
to "conventional" spin-offs
in terms of long-run stock performances, return on assets (ROA), growth opportunities, capital expenditures, and earnings per share (EPS).
Previously, such so-called comfort rulings were available to resolve questions such as (i) whether a spin-off
has an adequate corporate business purpose, (ii) whether a spin-off
will be regarded as used principally as a device for the distribution of earnings and profits, and (iii) whether a spin-off
and any prior or subsequent acquisition of stock in the Parent or the Spinco are part of a plan under section 355(e).
2002-49, another important ruling on the active trade or business requirement of a spin-off
Notwithstanding the compelling corporate business objectives of Fortune Brands' spin-off
of Gallaher, the transaction probably would not have been undertaken had the proposed regulation been finalized before the deal was concluded.
The formation of the new subsidiary provides a vehicle to consummate a transaction, spin-off
an asset to our shareholders and/or to facilitate the financing of such a transaction".
1) A number of related provisions and conforming amendments were adopted at the same time, the cumulative effect of which is to revise substantially the conditions for obtaining a tax-free separation -- whether as a spin-off
, split-off, or split-up(2) -- of one corporation from another pursuant to section 355.
For example, in a spin-off
, the original option no longer has the economic value it had prior to the restructuring, because the entities have been separated and the sum of the separate economic parts may not equal the original economic whole.
, Split-Up and Split-Off Transactions
Usually, the amount of tax at risk, the size and complexity of the transaction, and the presence of public shareholders require obtaining an advance ruling from the Internal Revenue Service when the taxDaver is planning a spin-off
Sponsored by Price Waterhouse and IBC, an international conferencing corporation, the two day program will bring together many of the country's most experienced corporate executives in spin-offs
, who will discuss strategic advantages of and vehicles for spinning off corporate assets.
Cendant expects that the refinancing of these debt securities and any other debt at the time of the spin-offs
will be allocated among the new Real Estate Services, Hospitality, and TDS companies, generally based upon the expected ability of each new company to service its debt load.