United No More – FTD Spinoff Planned For November

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United Online (UNTD) has had a rough time trying to break itself up. Its planned spinoff of well known flower company FTD Companies has been delayed several times and the transaction was pushed off another month as the company was unable to secure the necessary approvals in time. Maybe its having an existential crisis – after all its name has the word ‘United’ in it. The spin is now expected to be completed on November 1 to UNTD shareholders of record as of October 10th, with shareholders receiving one share of FTD for every five shares of UNTD owned. The new company will trade on the NASDAQ under the ticker ‘FTD’.

United Online will continue to operate a hodgepodge of oldschool internet businesses including brands such as ‘Classmates®, StayFriends™, MyPoints®, NetZero®, and Juno®’. The spinoff won’t be the only change for UNTD shareholders as the board of directors also approved a 7 for 1 reverse split of UNTD shares. That is certainly one way to inflate the share price. The new company is not expected to pay out any dividends in the future, but United will will pay a $0.15 in Q4 with future payouts depending on the company’s health. Its $80m stock repurchase program has been extended through the end of 2014 as well.

The company also clarified the new leadership structures for both companies as United’s current CEO, President and Chairman Mark Goldston will be stepping down. Francis Lobo will fill part of the void by becoming President and CEO of United Online and a member of its Board of Directors. Mr. Lobo was most recently an executive at AOL so he should have a lot of experience with declining internet businesses. Robert S. Apatoff, FTD’s current president, will become President and CEO of the new FTD Companies.

FTD seems to be the jewel being unearthed here with growing revenues and profits while United’s other assets continue to decline. Here is an interesting Seeking Alpha piece taking a look at the spin and placing a value on the company.

Disclosure: Author holds no position in any stock mentioned.

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