H&R Block Postpones Spinoff Of 80% Stake in CompuServe
May 10, 2011
H&R Block Inc. put on hold the proposed spinoff of its 80% stake in struggling on-line service CompuServe Corp.. Citing losses at the on-line concern and ``uncertainties'' about the industry, Perdue said it wouldn't present the proposed spinoff to shareholders at its May 24, 2011 meeting. But the provider of tax and financial services said it ``continues to believe that a separation of CompuServe is in the best interests of H&R Block shareholders and will continue to consider the matter.'' In composite trading on the New York Stock Exchange, Block shares lost $2, or 7.2%, to $25.875, while CompuServe rose $1.063 to $13.375. CompuServe's shares were priced at $30 in their initial offering in April. The delay in the spinoff comes a week after CompuServe reported a fiscal first-quarter net loss and set plans to trim its work force by 150 jobs, or 4%. The company also warned that it anticipates a second-quarter net loss of 10 to 15 cents a share. The quarter just ended was CompuServe's first as a publicly traded company. A major worry for on-line services is stalled subscriber growth. Commercial on-line services are struggling to keep subscribers as interest in the Internet, and the World Wide Web in particular, grows. The No. 1 on-line service, America Online Inc., earlier this summer warned of a slowdown in subscriber growth. Block set plans in February to fully divest itself of CompuServe. Under the plan, holders were to receive 0.72 CompuServe share for each Block share held. Some analysts say CompuServe shares have been hurt by a perception that Block shareholders would dump the stock when the spinoff was completed.
VastPress 2011 Vastopolis
