Covidien to Issue 8 Mallinckrodt Shares for Each Covidien Share in Spinoff (5/24/13)
By Melodie Warner Covidien PLC's (COV) board approved the spinoff of its pharmaceuticals business and set an exchange ratio of eight Mallinckrodt PLC shares for each Covidien share.
Covidien--a maker of operating-room gear, generic drugs and other medical supplies--said it expects the distribution to occur on June 28 for shareholders of record as of June 19.
Trading of Mallinckrodt shares is expected to begin July 1 on the New York Stock Exchange under the symbol MNK.
Covidien has generally seen improved revenue over the past two years on the strength of its medical-devices sales. It had said it intended to spin off its pharmaceuticals business by mid-2013.
In the meantime, Covidien has been bulking up its pharmaceutical product pipeline through acquisitions, such as October's $100 million acquisition of CNS Therapeutics Inc., a developer of treatments for neurological disorders and intractable chronic pain.
Covidien reported last month its second-quarter earnings fell 12% as restructuring costs and other items masked the company's improved sales.
Shares closed Thursday at $65.21 and were inactive premarket. The stock is up 13% so far this year.
Write to Melodie Warner at melodie.warner@dowjones.com