Brown-Forman Corporation (NYSE:BFB)(NYSE:BFA) announced today that its board of directors approved a cash distribution of approximately $205 million to be distributed pro rata to the holders of its common stock. Approximately $1.66 per share will be distributed on May 10, 2007 to stockholders of record on April 5, 2007. This amount will be adjusted for the actual number of outstanding shares on April 5, 2007.
This distribution will be equal to the cash received (net of fees)
for the sale of the Company’s Consumer Durables segment, excluding
Hartmann. Now that the Company has completed the sale of this segment,
proceeds can be distributed in partial liquidation of the Company.
Brown-Forman Chief Executive Officer Paul Varga stated, “The sale
of this segment reinforces our company’s focus on brand-building in
the thriving wine and spirits business.”
The Company elected this form of distribution as a tax-efficient
means of distributing cash to the Company’s shareholders. Under
Sections 302 (b)(4) and 302 (e)(1) of the Internal Revenue Code, each
non-corporate shareholder should receive capital gains treatment as if
they sold part of their stock, taking into account their tax basis in
the stock. However, this statement is not intended to be, nor should
it be interpreted as, tax advice by the Company. Each shareholder
should consult his or her own tax advisor regarding the federal,
state, local and foreign tax consequences to the shareholder of the
distribution.
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