H&R Block Inc, Kansas City, Missouri, apparently believes prospects for its CompuServe Inc subsidiary as a free-standing company are so poor it’s abandoned plans to spin off the 80% it still owns after the spring flotation by handing out shares to its shareholders, and will now hold on to them. The decision comes after the online service provider predicted second quarter losses of $9m to $13.5m – or 10 cents to 15 cents per share – on the back of its first quarter loss of $29.6m. The H&R Block board of directors cited the losses and uncertainty in the online industry as its reason for not spinning off the rest of the business. In April the company sold 20% of CompuServe shares in an initial public offering. The shares were floated at $30 in April and are now down at $12.50. CompuServe says it still intends to complete the spin-off, but wouldn’t say when. The parent company is left in the worst of all possible worlds because, with CompuServe shares trading, it can’t hide just how badly the company is doing within its own figures.
