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The Madison Square Garden Co. has approved a plan to explore breaking into two publicly traded companies. This new plan could split its entertainment businesses from its media & sports divisions.

MSG said it approved the decision to evaluate the proposed separation which has been under consideration since July. The company stated that the move could give shareholders the ability to more clearly evaluate each of the businesses and their prospects.

“The [entertainment] company would capitalize on significant opportunities to grow rapidly within the changing entertainment landscape,” said Tad Smith, president and CEO of MSG. :The [sports unit] would enjoy steady growth and high cash flow that we expect will result in capital returns to shareholders.”

Madison Square Garden Co. said it did not have a timetable for the spin-off, which would be subject to final approval from its board.

The company also announced that Nelson Peltz, the CEO of Trian Fund Management, and Scott Sperling, co-president of the private-equity firm Thomas H. Lee Partners, had been nominated to its board. Peltz has recently called for PepsiCo to spin off its underperforming beverage unit.

In addition, Madison Square Garden Co.’s board authorized the repurchase of up to $500 million of the company’s stock. Its shares shot up $10.89, or 16.6 percent, to $76.67 in after-hours trading Monday.

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