CHICAGO (AP) — The board at Telephone and Data Systems Inc. approved a plan to reclassify its special common shares as common shares, the telecommunications service provider said Tuesday.
Each special share will be considered one common share, while each common share will now be classified as 1.087 common shares. Each Series A common share will be considered 1.087 Series A common shares.
Shares of the Chicago company rose $1.49, or 6.2 percent, to $25.70 in afternoon trading.
Telephone and Data Systems said the common shares typically trade higher than the special common shares, which were created in 2005. In a statement, the company said its board thinks that the adjustment “best reflects the long-term relative trading ratio” of the common stock compared with the special common stock. Telephone and Data Systems also said the change simplifies its capital structure, improves its market liquidity and gives it more financial flexibility.
The company added that the change will allow special common shareholders to continue to get the same total quarterly dividend they now receive.
The plan must still be approved by a majority of unaffiliated investors who hold the company’s common and special common shares. It is expected to be put to a vote at a meeting on Jan. 13.