Covidien to spin out pharma business to Mallinckrodt

Ireland-based health care products group Covidien (NYSE: COV) says that its board of directors has approved the previouslu-announced separation of the pharmaceuticals business from the rest of Covidien (The Pharma Letter February 4). The separation will occur by means of the declaration of a dividend in specie of the pharma business, to be effected by the transfer to Mallinckrodt and the issuance by Mallinckrodt of ordinary shares directly to Covidien’s shareholders.

For every eight ordinary shares of Covidien held, Covidien shareholders will receive one ordinary share of Mallinckrodt plc. No fractional shares of Mallinckrodt will be issued. Shareholders will receive cash in lieu of fractional shares. The distribution is expected to occur on June 28, 2013, to Covidien shareholders of record as of the close of business on June 19, 2013.

“New” Mallinckrodt to start trading on July 1