HOLDERS OK NM SPINOFF

NEW YORK — Shareholders on Wednesday approved the spinoff of Neiman Marcus Group from Harcourt General Inc., as expected. The transaction, a tax-free distribution of shares, is subject to approval from the Internal Revenue Service.
As reported, Harcourt in May said it would spin off most of its 54 percent stake in NMG to shareholders in a move to increase investors’ interest in both stocks by creating separate entities. The spinoff does not affect how the operations of NMG are managed. In the spinoff, Harcourt shareholders will get about three-tenths of a share of NMG class B stock for every share of Harcourt they own.
Harcourt will exchange 21.4 million shares of the 26.4 million NMG shares it owns for an equal number of class B NMG shares that will be able to elect at least 82 percent of NMG’s board. These shares will subsequently be distributed to shareholders. After completion, Harcourt, an educational publisher, will have about five million NMG shares, or a 10 percent stake. Richard A. Smith, Harcourt chairman, and his family will hold 28 percent of the class B stock in NMG, which represents about 12 percent of total outstanding shares. Harcourt acquired its majority stake in NMG in 1987 from Carter Hawley Hale.