This excerpt taken from the VZ 8-K filed Feb 29, 2008.
Subject to the satisfaction of certain conditions, Verizon will spin off Spinco by distributing all of the shares of Spinco common stock to a distribution agent, which will hold those Spinco shares for the benefit of Verizon stockholders. The Spinco shares will then immediately be converted into shares of FairPoint common stock in the merger of Spinco with FairPoint. It is anticipated that as long as all conditions are satisfied and assuming completion of the related financing transactions, both the spin-off of Spinco to Verizon stockholders and the merger of Spinco with FairPoint will occur on March 31, 2008.
It is currently estimated that Verizon stockholders will receive one share of FairPoint common stock for approximately every 53.2203 shares of Verizon common stock that they own on March 7, 2008, or approximately 0.0188 shares of FairPoint common stock for each share of Verizon common stock owned on March 7, 2008. The exact distribution ratio will be determined based on the number of shares of Verizon common stock outstanding on the record date for the spin-off (subject to certain adjustments) and the number of shares of FairPoint common stock outstanding at the time of the merger. Under the terms of the merger agreement, FairPoint will pay cash in lieu of any fraction of a share of FairPoint common stock.
It is expected that the receipt of FairPoint common stock in the merger will be tax-free to Verizon stockholders, except to the extent that cash is paid to Verizon stockholders in lieu of a fraction of a share of FairPoint common stock.
Verizon News Release, page 3