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Tuesday, 06/04/2013 12:40:29 AM

Tuesday, June 04, 2013 12:40:29 AM

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Covidien to Issue One Mallinckrodt Shares for Each 8 Covidien Shares in Spinoff (5/24/13) [CORRECTION]

By Melodie Warner
Covidien PLC's (COV) board approved the spinoff of its pharmaceuticals business and set an exchange ratio of one Mallinckrodt PLC shares for eight Covidien shares.

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

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