September 6, 2011 / 10:14 PM / in 6 years

UPDATE 1-Forest Oil to hand out Lone Pine shares as special dividend

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* Forest Oil to distribute Lone Pine shares among its shareholders

* Forest Oil shareholders to get 0.612 Lone Pine share for each share they own

* Distribution to occur on Sept 30

Sept 6 (Reuters) - Forest Oil Corp said it would spin off its majority stake in Lone Pine Resources Inc by distributing the Canadian oil and natural gas company’s shares among its own stockholders in the form of a special dividend.

Forest Oil owns about 70 million shares of Lone Pine, representing about 82 percent of total shares outstanding.

The company’s stockholders will get about 0.612 of a Lone Pine share for each Forest Oil share they own. Fractional shares will be distributed as cash, Forest Oil said.

The distribution will occur on Sept. 30 to all holders of Forest Oil stock as on Sept. 16.

The final distribution ratio will be set on the record date and will be calculated by dividing Lone Pine’s 70 million shares by the number of outstanding Forest Oil shares at the time.

As of Aug. 31, Forest had 114.4 million shares outstanding.

Lone Pine, which has operations in Canada, had sold 15 million shares at $13 each in an initial public offering on the New York Stock Exchange in late May.

After the IPO, Forest Oil owned 82.3 percent of Lone Pine’s common stock, which it had planned to distribute to its shareholders within four months.

Forest Oil’s shares closed at $17.82 on Tuesday, while those of Lone Pine closed at $8.79 on the New York Stock Exchange. (Reporting by Arnav Das Sharma in Bangalore; Editing by Viraj Nair)

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