Definition of Split-off:
When a piece of a company is sold off, the stock is converted into shares of the new company.
In a split-off, the parent company offers shareholders the option to keep their current shares or exchange them for shares of the divesting company. Shares outstanding are not proportioned on a pro rata basis like in other divestitures. In some split-offs, the parent company may choose to offer a premium for the exchange of shares to promote interest in shares of the new company.
A split-off is a corporate reorganization method in which a parent company divests a business unit using specific structured terms. There can be several methods for structuring a divestiture. Split-offs, spinoffs, and carveouts are a few options, each with its own structuring.
How to use Split-off in a sentence?
- Split-offs are motivated by the desire to create greater value for shareholders through the shedding of assets and offering of a new, separate company.
- Split-offs are a method that can be used for a corporate divestiture.
- Split-offs do not mandate a proportioned pro rata share distribution but rather offer shareholders the option to exchange shares.
Meaning of Split-off & Split-off Definition