For the stock split to take place, the company needs shareholder approval for an increase in the number of authorized shares of Federated common stock. A vote to increase the number of common shares authorized from 500 million to one billion will be held in conjunction with Federated's Annual Meeting on May 19.
"These actions reflect our confidence in the future operating results and cash flow of the company, as well as our ongoing determination to build long-term shareholder value," said Terry J. Lundgren, Federated's chairman, president and chief executive officer, in a statement announcing the stock split.
If the split is approved, it would represent the first stock split since Federated was listed in its current form on the New York Stock Exchange in February 1992. Trading would begin on a split-adjusted basis on June 12, 2006.
Federated's board also declared a 2% increase in the quarterly cash dividend payable July 3, to Federated shareholders of record at the close of business on June 16. If the stock splits, the quarterly dividend will be 12.75 cents per outstanding common share. If the stock does not split, the quarterly dividend will be 25.5 cents per outstanding common share.
Federated shares closed at $71.91, up 26 cents, on the New York Stock Exchange. In aftermarket electronic trading, the company added 74 cents, to close at $74.65.Federated, with corporate offices in Cincinnati and New York, operates more than 850 department stores and more than 720 bridal and formalwear stores in 49 states, the District of Columbia, Guam and Puerto Rico. The company operates under the names Macy's, Bloomingdale's, Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's, Lord & Taylor, L.S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, Strawbridge's, The Jones Store, David's Bridal, After Hours Formalwear and Priscilla of Boston.
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