ADS - Alliance Data to spin off its loyalty business to shareholders

Alliance Data Systems (ADS) plans to spin off its LoyaltyOne segment, comprising its Canadian Air Miles Reward Program and Netherlands-based BrandLoyalty business, in a move that will allow ADS to pay off some corporate debt.Immediately after the transaction, ADS stockholders will own shares in both companies with Alliance Data keeping a minority stake in the loyalty business."The spinoff is expected to be tax-free, resulting in two independent, U.S.-based, publicly traded companies, Alliance Data and 'Spinco,' positioned to pursue their respective unique growth opportunities and build long-term value," the company said.ADS stock rises 0.9% in premarket trading.At the time of the spinoff, Spinco expects to complete a debt financing, with the net proceeds going to ADS as a dividend. ADS will use those proceeds to retire a portion of its corporate debt.The company expects the spinoff to be completed by the end of the year.

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Alliance Data to spin off its loyalty business to shareholders