Circuit City Finishes CarMax Severance1 Oct, 2002 By: Hive News
Circuit City Stores, Inc. announced today that it has completed the tax-free separation of the CarMax Group by redeeming the outstanding shares of CarMax Group Common Stock and distributing shares of new CarMax, Inc. common stock.
Today's separation of CarMax follows the February 2002 authorization by the Circuit City board of directors to pursue separating the CarMax auto superstore business from the Circuit City consumer electronics business. Shareholders approved the separation and several related proposals at a special meeting held on Sept. 10.
"I believe that both CarMax and Circuit City have what it takes to capitalize on their many opportunities and succeed as independent companies," said W. Alan McCollough, chairman, president and chief executive officer of Circuit City. "With substantial improvement over the past three years and an aggressive expansion plan underway, CarMax has proven that customers enthusiastically embrace its unique offer, and it has the processes, systems and people in place to deliver that offer as an independent company. Circuit City management remains intensely focused on its current strategic initiatives and its commitment to creating enjoyable shopping experiences through exceptional customer service. Separating Circuit City and CarMax should provide benefits to both companies as each management team will be better able to focus on their business' specific needs and to allocate resources and capital most appropriately."
In the separation, each share of outstanding CarMax Group Common Stock was redeemed in exchange for one share of new CarMax, Inc. common stock. Concurrent with the redemption, a stock dividend of 0.314 of a share of CarMax, Inc. common stock was distributed to shareholders of Circuit City Group Common Stock. Cash will be paid in lieu of the issuance of any fractional shares of CarMax, Inc. common stock.
Also effective today, the Circuit City Group Common Stock has been renamed Circuit City common stock and represents an ownership interest only in the Circuit City business and CarMax, Inc. becomes an independent, separately traded public company. The New York Stock Exchange trading symbols remain CC for Circuit City and KMX for CarMax, Inc.