Tesco shareholders meet virtually to vote on £5 billion divi payout
The group is staging a virtual general meeting for shareholders to vote on plans to pay a £5 billion special dividend, that was announced in October.
The funds come from the sale of Tesco’s Thai and Malaysian operations. Britain’s biggest retailer will also use some of the proceeds to make a major contribution to its pension fund.
After the payment of the special dividend, Tesco will run a share consolidation scheme, whereby shareholders receive 15 “new” shares for every 19 “old” shares that they own.
The result will be that the new shares plus the special dividend payment will equate to the prior value of investors’ old shares, all other things being equal.
Ahead of Thurday’s exepcted vote, Russ Mould, investment director at AJ Bell, said: “Tesco has slowly rebuilt its dividend payments after the cut in the fiscal year to February 2015 and the absence of any shareholder distributions at all in 2016 and 2017.
“The company’s decision to repay all of the business rates relief that it had received from the government – some £585 million – has defused some critical comment over whether it was right for the firm to make ordinary dividend payments while it was accepting taxpayers’ cash.
“Based on current analysts’ consensus forecasts for a dividend of 7.84p a share for the year to February 2021, Tesco’s regular dividend payment is expected to cost around £770m.”
A message from the Editor:
Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.scotsman.com/subscriptions
Want to join the conversation? Please or to comment on this article.