Enter multiple symbols separated by commas

Time Warner Splitting With Cable Company

Time Warner and Time Warner Cable said Wednesday they would split into two companies and pay Time Warner Cable shareholders a one-time $10.9 billion dividend.

The Time Warner building.
Mark Lennihan
The Time Warner building.

The move comes after pressure from investors for Time Warner to streamline its focus as a pure media content company and rescue its stock price.

The news lifted Time Warner shares by more than 3 percent in pre-market activity on the New York Stock Exchange.

Time Warner will exchange its 12.4 percent interest in TW NY Cable Holding , a subsidiary of Time Warner Cable , for 80 million newly issued shares of Time Warner Cable's Class A common stock.

This will increase Time Warner's ownership stake in Time Warner Cable's common stock from 84 percent to 85.2 percent.

Time Warner Cable's one-time dividend of $10.27 per common share - a total of about $10.9 billion - will be payable immediately prior to completion of the separation. Time Warner will receive $9.25 billion of this dividend.

Time Warner Cable expects to fund the special dividend through its existing revolving credit facility and $9 billion from a committed two-year bridge term loan from a syndicate of banks.

Time Warner also agreed to provide a commitment for a supplemental two-year term load of up to $3.5 billion to enable Time Warner Cable to repay the bridge.