Dissatisfied with the weak performance of its share price, US West Inc has decided to follow the General Motors Corp route of trading different classes of its stock. Initially it will split the current shares into two classes, one tied to the performance of its 14-state regulated telephone business and one that will track the performance of its multimedia businesses. The plan will be implemented through a tax-free distribution of new shares that will leave current shareowners with the same level of economic interest in the company as they currently hold. The existing shares will be designated US West Communications Group shares, and holders will get one new US West MediaVision Group share for every Communications Group they hold. Dividends will go with the Communications Group shares; the MediaVision Group, which the company hopes will be rated as a go-go collection of multimedia businesses, will not initially pay a dividend. As well as the video-on-demand businesses, the MediaVision Group will include the company’s wireless telehony interests, its directories and its international assets. It is assumed that in a break-up, each share of either class would have the same call on the assets of the entire company, but this was not made clear, although US West stresses that the company will continue to operate as a single entity.
