Comcast Corporation today announced that its Board of Directors has approved a proposal to amend and restate the Companys Amended and Restated Articles of Incorporation in order to reclassify each share of Comcast Class A Special Common Stock (Nasdaq: CMCSK) into one share of Comcast Class A Common Stock (Nasdaq: CMCSA) (the “Reclassification”), subject to shareholder approval.
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Class A shares typically were priced higher than the “K” shares due to their voting rights.
That is created to end “investor confusion caused by having two classes of publicly traded stock” and improve “the trading liquidity of Comcast’s publicly traded stock”, the company says.
Shares of Comcast rose 16 cents to $62.14 in morning trading. At present there are about 347 million Class A Special shares outstanding, compared to almost 2.1 billion Class A shares.
CEO Brian Roberts will continue to own another form of untraded stock with 15 votes per share that gives him a third of all the votes, even though he only owns 0.4% of the company’s economic value. Directors want to merge the two into a single, voting stock.
The special shares, which have no voting rights, were used for acquisitions and for executive compensation until they were used for the AT&T Broadband acquisition in 2001.
The board approved the reclassification over the weekend. To make the arrangement tax-free, AT&T shareholders had to control more than half of the shares after the merger.
The push to streamline the stock structure began this summer when the S&P changed its protocol to include all classes of stock for its member companies.
In connection with the Reclassification, Comcast has filed a preliminary proxy statement with the Securities and Exchange Commission (“SEC”).
Shareholders as of October. 20 are eligible to vote in the election, which is expected to be held before the end of December.
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The move will expand voting rights to all holders of publicly traded Comcast shares and shareholder voting power will remain at just 66 and 2/3%, with Roberts controlling the rest.
