Zapata Corp is moving forward with its on-again off-again internet plans by spinning off a portion of its Zap.com unit in a rights offering to existing stockholders. The Houston-based company will offer up to 13.6 million shares at $8 each, raising $108.8m before expenses. Shareholders will have the right to purchase one Zap.com share for each Zapata share held, according to a regulatory filing. Zap.com will have an estimated 50 million total shares outstanding after the offering, the company said.
The move by Zapata, which makes its money mainly in the fish oil and meat casings businesses, is the latest in a strange story after the company announced plans last year to enter the internet fray by acquiring various web properties, and creating a portal, only to abandon the strategy and resume it months later. The planned spin-off appears to signal Zapata’s commitment to building an internet business this time around.
Also revealed in the SEC filing was the fact that Zapata recently settled two lawsuits – one a trademark infringement case and the other dispute over the acquisition of a natural gas compression business in 1993. No financial terms of the settlements were revealed, but the company said it will record a charge of $0.14 per share in the first quarter for legal expenses. Zapata shares closed at $10.375 Tuesday, down $1.6875 on the day.
