US West Splits Stock Into Phone, Multimedia

US West Inc. said Monday that it is creating two classes of stock for its telephone and multimedia businesses, hoping the sum of the parts will be greater than the whole.

Long frustrated by its lagging stock price, the regional Bell company hopes the plan will unlock the hidden value in each unit. It has no plans to spin off any of the businesses.

The telephone stock, known as US West Communications Group, represents the company’s bread-and-butter business in 14 states, with revenue of $9 billion.

The multimedia stock represents US West’s presence in electronic commerce, including mobile phones and cable television. It will be named US West MediaVision Group.

Included in this unit will be a stake in media and entertainment giant Time Warner Inc. and various overseas telephone, cable TV and cellular ventures. It will have revenue of $2 billion, or $4 billion including minority interests.

US West, based in Englewood, Colo., said creating targeted stocks will help investors realize full value from its long-term strategy while increasing the company’s financial flexibility.

“We have received wide recognition and support for our long-term strategy,” said Richard McCormick, US West chairman and chief executive. “But we have felt for some time that the financial market is undervaluing our stock.