(Reuters) - Madison Square Garden Co, which owns the New York Knicks and New York Rangers, said it would spin off its sports and entertainment business into a publicly traded company.
Shares of Madison Square Garden were up 5.3 percent at $85 in after-market trading.
The company said in October that it was exploring a separation of its entertainment business from its media and sports business.
The separation would be structured as a tax-free spinoff to shareholders on a pro rata basis, Madison Square Garden said on Friday..
The spinoff, expected to be completed in 2015, will result in a company that would have a portfolio of sports teams, entertainment productions and venues.
A separately traded media company would distribute sports and entertainment content.
Auction house Sotheby’s earlier this month named Madison Square Garden Chief Executive Tad Smith its CEO.
Madison Square Garden shares had gained about 21 percent in the six months to Friday’s close of $80.73 on the Nasdaq.
Reporting by Devika Krishna Kumar in Bengaluru; Editing by Sriraj Kalluvila