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Comcast to turn nonvoting K shares into common stock

Comcast Corp. has proposed reclassifying 347 million nonvoting K shares as regular common stock, while preserving the Roberts family's 33 percent voting control and ownership of the cable and Internet giant, the company said Monday.

Comcast Corp. has proposed reclassifying 347 million nonvoting K shares as regular common stock, while preserving the Roberts family's 33 percent voting control and ownership of the cable and Internet giant, the company said Monday.

The changes will be reviewed by federal regulators and will need shareholder approval.

K shares were first issued in the mid-1980s for Comcast to acquire other cable companies and compensate employees. They carried the same economic rights as Comcast common shares but had no votes in corporate governance.

Until recently, the K shares (traded under the symbol "CMCSK") traded at a 2 percent discount to Comcast's common stock ("CMCSA").

This summer, S&P Dow Jones Indices said index-tracking investment funds had to own both Comcast common stock and K shares. Previously, those funds only had to own Comcast common stock. This resulted in higher demand among institutional investors for K shares, which recently have traded at a significant premium to common shares.

There are 347 million K shares that will be converted into common shares, the company said. There are 2.1 billion common shares.

The Roberts family retains effective control of the Philadelphia-based cable giant through super-voting B shares. Each B share carries 15 votes. Brian L. Roberts is chairman and CEO of Comcast.

To preserve this 33 percent control while folding the K shares into common stock, the power of the common shares will fall to 0.12 votes per share from 0.14.

"We believe the reclassification of CMCSK into CMCSA will benefit Comcast's shareholders in many ways, including by eliminating investor confusion caused by having two classes of publicly traded stock and improving the trading liquidity for all shareholders. The Comcast board of directors considered these and other factors, and believes the one-for-one reclassification ratio is fair to and in the best interests of all of our shareholders," the company said in a statement.

The board approved the reclassification over the weekend. A final shareholder vote will have to wait until the U.S. Securities and Exchange Commission reviews the proposed reclassification. The company expects the change to go forward this year.

bfernandez@phillynews.com

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