Shares of Madison Sq. Backyard Sports activities Corp. jumped 16% on Wednesday after its board of administrators unanimously accepted a plan to discover a tax-free spinoff that will separate its New York Knicks enterprise from its New York Rangers enterprise to create two publicly traded firms.
“We’re exploring the chance to additional create worth for our shareholders by separating our two skilled sports activities franchises into distinct firms,” MSG Sports activities CEO and chairman Jim Dolan mentioned in a press release. “Each the Knicks and Rangers are premier groups of their respective leagues, with storied histories and enormous and passionate fan bases. We imagine this proposed transaction would offer every firm with enhanced strategic flexibility, its personal outlined enterprise focus, and clear traits for buyers.”
If the corporate proceeds with a by-product, the corporate’s Class A and B shareholders of file would obtain a pro-rata distribution of 100% of the widespread inventory within the newly created public firm.
Following the proposed spinoff, the New York Knicks firm would come with the Knicks franchise, with a historical past of eight journeys to the NBA Finals and two NBA Championships, in addition to the Westchester Knicks, the crew’s unique NBA G League affiliate.
In the meantime, the New York Rangers firm would come with the Rangers, the NHL franchise whose 100-year historical past consists of 4 Stanley Cup Championships, and the Hartford Wolf Pack, a minor-league hockey crew within the AHL and the highest affiliate crew for the Rangers .
MSG famous that there may be no assurance {that a} potential transaction might be accomplished. It has not set a timetable for completion of the method, which is topic to situations together with league approvals, board approval and receipt of a tax opinion from counsel.
