Business systems provider Comverse Technology Inc. (Nasdaq: CMVT) announced it will distribute a dividend through its subsidiary Comverse Inc.
Comverse said that it is currently exploring the most efficient method of distribution, with the distribution expected to occur in the second half of fiscal 2012. Comverse announced that it is also exploring alternatives to eliminate its holding company structure and this was likely to happen about the time of the distribution of the Comverse shares.
Comverse Technologies CEO Charles Burdick said, "The Board reached the decision to pursue a distribution of Comverse to our shareholders following a comprehensive strategic review process, and believes it is in the best interest of CTI shareholders.
He added,"We are confident that by creating an independent, well-capitalized Comverse, CTI and its shareholders will be able to benefit from increased strategic flexibility at Comverse and with its stake in Verint. The elimination of the holding company structure is cost-effective and allows for the separation of assets in a tax efficient manner. The separation of Comverse will facilitate greater alignment of incentive equity and shareholder value and increased management and Board focus, and also will be seen as a positive event by customers and employees at both Comverse and Verint."
Comverse's share price fell 5.34% on the opening on Nasdaq today to $6.22, giving a market cap of $1.31 billion.
Published by Globes, Israel business news - www.globes-online.com - on January 11, 2012
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