Open Text Corporation announced that its Board of Directors has approved a two-for-one stock split of its outstanding common shares. The two-for-one stock split will be implemented by way of a stock dividend whereby shareholders will receive one common share for each common share held. There were 60,473,680 OpenText common shares outstanding as of January 22, 2014. Adjusting for the stock split, there will be 120,947,360 OpenText common shares outstanding.
The record date for the stock dividend will be February 7, 2014 and the payment date will be February 18, 2014. OpenText's common shares will be traded in accordance with the "due bill" procedures of the NASDAQ and the Toronto Stock Exchange from February 5, 2014 through February 18, 2014. This means any trades that are executed on the NASDAQ or the Toronto Stock Exchange during this period will be identified to ensure purchasers of OpenText's common shares receive the entitlement to the stock dividend. OpenText's common shares are expected to begin trading on a post-stock dividend basis on the NASDAQ and on the Toronto Stock Exchange on February 19, 2014. The due bill redemption date will be February 21, 2014.
OpenText is undertaking the stock split to make the common shares more readily accessible to individual shareholders, increase and broaden OpenText's shareholder base, and improve the liquidity of the market for OpenText's common shares.
OpenText shareholders, with or without a physical share certificate, do not need to take any action with respect to the stock dividend because OpenText has moved to a Direct Registration System (DRS). OpenText's transfer agent will send registered owners of OpenText common shares a DRS advice form, which will represent the additional number of common shares that they are receiving as a result of the stock split. This will allow shareholders to hold their additional common shares in a "book-entry" form without having a physical share certificate issued.
OpenText is ascribing essentially no monetary value to the stock dividend, and the stock dividend will not constitute a taxable transaction for either Canadian tax purposes or U.S. federal income tax purposes. Shareholders are advised to contact their tax advisors for further information. The stock split will not dilute shareholders' equity. All share and per share data for future periods will reflect the stock split.
