The Reader’s Digest Association, Inc., has merged its Class A nonvoting common stock and Class B voting stock into a single class, with one vote per share. The arrangement substantially reduced the control two funds exert over the Pleasantville, NY-based publisher and direct marketer.
The new program leaves the former Class A shareholders with 74% of the shares of voting stock, while the DeWitt Wallace-Reader’s Digest Fund and the Lila Wallace-Reader’s Digest Fund, which together had held 50% of the voting stock, saw their voting power drop to 13%.
The company has repurchased nearly 4.6 million shares of its Class B stock at a cost of $100 million. Each remaining share of Class B stock was exchanged for 1.22 shares of the new stock. Shares of the class A stock were swapped for one share of the new stock, which will be traded on the New York Stock Exchange under the symbol RDA.
Under the new structure, all shares will have equal rights in the election of the company’s directors, and shareholders will be able to vote in accordance with their ownership level.
