The Board of ConocoPhillips (COP: Quote) Wednesday approved the spin-off of its downstream unit, paving the way to join a host of companies that have separated their refining business to unlock shareholder value.
Detailing the spin-off initially revealed last July, the company said the upstream business will have the ConocoPhillips name and will run as the industry's largest and most diverse pure-play, upstream entity. The unit will be led by CEO Ryan Lance.
The downstream company, called Phillips 66, will be uniquely placed via businesses comprising refining and marketing, midstream and chemicals businesses. Both companies will be based in Houston, Texas.
The spin-off will be effected through the distribution of Phillips 66 shares to holders of ConocoPhillips common stock. The distribution is expected to occur after market close on April 30, 2012.
The plan provides ConocoPhillips shareholders with one share of Phillips 66 common stock for every two shares of ConocoPhillips held at the close of business as on April 16.
Upon the distribution, Phillips 66 will run as an independent entity that will trade on the New York Stock Exchange under the symbol PSX. ConocoPhillips will retain no stake in Phillips 66.
A "when-issued" public trading market for Phillips 66 stock is expected to commence on or about April 12 under the symbol PSX WI and will continue through the distribution date. A "regular way" trading of the stock is expected to begin on the first trading day following the distribution date.
The distribution of Phillips 66 stock will generally not be taxable to ConocoPhillips or U.S. holders of ConocoPhillips common stock.
Beginning on or about April 12, and through the distribution date, it is expected that there will be two ways to trade ConocoPhillips common stock - either with or without the right to receive shares of Phillips 66 common stock.
The ConocoPhillips spin-off follows some similar moves of separation plans by other companies including Marathon Oil Corp.'s (MRO), El Paso Corp. (EP), and Williams Cos. (WMB).
COP closed Wednesday on the NYSE at $76.27, down $0.04 or 0.05%, on a volume of 6.3 million shares.
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by RTT Staff Writer
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