Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

H&R Block to Spin Off Compuserve

KANSAS CITY, Missouri -- H&R Block Inc. said Tuesday it will spin off its CompuServe online computer service business to shareholders and the public.


The company said its board approved a plan in which less than 20 percent of CompuServe will be offered to the public in April, and the rest distributed through a tax-free spin-off or split-off within a year.


CompuServe, which includes Spry, an Internet access and software company acquired in April, is one of the world's leading commercial online and Internet access services.


Analysts said the move was expected to mollify some H&R Block investors who have said CompuServe's value is not adequately reflected in the H&R Block stock price.


Company officials said an independent CompuServe will benefit from enhanced access to equity capital to support its growth and from increased opportunities for forging strategic alliances.


After repaying intercompany debt, CompuServe will use the remaining proceeds from the initial public offering to fund accelerated investment initiatives, the company said.


After the split, H&R Block, which is based in Kansas City, will focus on tax and financial services. It already has a dominant position in tax preparation worldwide.


H&R Block's shares, which closed Friday at $39.875 on the New York Stock Exchange, did not immediately open for trading Tuesday. Monday was a U.S. holiday.