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Agreed. A return of capital is preferred however, that was not put before shareholders in the original meeting as far as I am aware. It may be that the circular for Monday will give guidance and then voted upon. All of mine are in an ISA so won't affect me. My major concern is that if consolidation is more than keeping the share price as now e.g. to take the so to £3, £4 or £5 that we still get the price per share in our SAYE plans. A nice bonus
RW
I have already said that a special dividend can be used as the vehicle to make a return of capital payment.
Jaff
The original meeting voted for a special dividend and not a return of capital. Hope you are right though
I would expect a 'Capital Return' as the sale is a capital transaction, dividends are paid from the business income stream. Any funds from realisation of the asset not returned to shareholders will be deployed for the benefit of said shareholders i.e. through the business strategy going forward. Let's see what the BoD are up to.
I hope Monday`s announcement will reveal that TSCO have decided to re-name the payment as "Capital Return" , this would boost the share price by a good few % since the taxation on a "Dividend" would not apply.
I imagine that it will correspond to the reduction in share capital
hopefully we will all know on monday 25th jan when the circular is due to be released
Nutella
From a recent RNS . 'further details about the resolutions to be considered at the General Meeting, will be sent to shareholders on or around 25 January 2021.
Maybe the current trading range will buy time to fully digest those details and also give shareholders the time to think on whether or not to buy hold or sell before the 11th Feb.
Reading some of the other bb's it is clear that many investors are making too many assumptions on where they see the sp after the vaccine has been rolled out.
TSCO on the face of it looks pretty dull compared to the so called bargains out there. The market is forward thinking and a little too eager in thinking the worst is behind us.
Personally, I think the consolidation is to shore up the share price for institutional investors. I think it will be 5:2 or 5:3 but I bet I am wrong.
From all the the other peoples recent posts on the subject I think it will be 1 for every 5 , which will be a 20% reduction in your holding .
The divi at current price is 20% (ish ) The point of the consolidation is to shore up the sp by the amount of the dividend.
barchid
Many thanks. That is about all the information I could get from the internet. Plant food industry is going to be huge over the next decade and I know TSCO have a range that many vegans prefer. I have an investment in the US (Beyond Meat) that so far as done well for me. If TSCO did produce their own then imo a great asset that will only grow and benefit shareholders.
Leas
Great question, according to the Wicked website it was started by 2 entrepreneurs from US (wicked llc) but "partnered" with Tesco, read in to that what you want, but one of the founders is "execurive chef & director of plant foods innovation" for Tesco and came from Wholefoods.
Not sure if that makes it any clearer or not....
thanks
I don’t think it will be as bad as some think.
I suspect a 1:10 ish split
I think there’s an update on Monday
Does anyone know how the consolidation is going to work out ? Can't find anything about it .
Thanks longterminvestor. The tax situation certainly is a worry as effectively some of us could be worse off? Will have to wait and see exactly what happens? The reduction is share numbers after the consolidation will help with future dividends?
Any investor or colleague of TSCO know if their Wicked range is manufactured by the company or by a food producer in collaboration?
My research so far suggests it’s ‘in house’ I have an investment with a US company but looking to add a European Producer. The Wicked range is doing very well for TSCO and could be pivotal in bringing back some of the customers lost to Lidl and Aldi.
One thing for sure . The UK tax system will be very different very soon. To some degree I do see it as a return of capital rather than a special dividend. The sale of the Asia businesses was not for profit but to cut losses and contradicts the definition of a dividend.
Anyway no point in losing any sleep. Always sell if it did.
£8m trade today at just above the bud. 2.4206, reported as a sell. Do me a favour, even with liquidity you wouldn’t be able to negotiate that price for that volume:)
Indeed it does say "return of capital"
Well, I'm interested to see how it works. Although my Tesco is in an Isa so it doesn't matter either way.
gg
''so not sure what your point is here?''
The difference between a capital gain/loss or income tax to be paid
Sale of Thailand and Malaysia businesses approved by shareholders in May, regulatory approval and completion of sale expected in 2H 2020; to be followed immediately by shareholder meeting to approve the return of capital
https://www.tescoplc.com/news/2020/interim-results-202021/
reduction in share capital
Either way, invest 240k and 50k is coming back to you so not sure what your point is here?
I can't get my head round how a capital repayment would work. I assume the capital isn't coming out of retained earnings or its a normal dividend. So that leaves share account and share premium, which is less than 6bn in total, so no way they'd return 5bn through this.
Is there a tax accountant around?
Anyone thinking of purchasing £240,000 pounds worth of Tesco shares tomorrow so that you can shortly get back £50,000 of your capital, or would you be looking forward to £50,000 income.