Reckitt Benckiser Group PLC (LSE:RKT, XETRA:3RB) has unveiled plans to hand back about £1.6 billion to shareholders through a one-off special dividend, following the sale of its Essential Home business.
The consumer goods group said it intends to pay a special dividend of 235 pence a share after completing the disposal of the division to Advent International, a deal announced at the end of December.
Details of the payout are set out in a shareholder circular published on Wednesday. Reckitt said the dividend would be paid to shareholders on the register at 6.00pm on Friday 30 January, subject to approval at a general meeting later this month. Payment is expected on Friday 20 February.
Alongside the dividend, Reckitt is proposing a share consolidation, a technical adjustment designed to keep the share price broadly steady after such a large cash return. For every 25 existing shares, investors would receive 24 new shares, each with a slightly higher nominal value.
The idea is that while shareholders will own fewer shares, each should be worth more, leaving their overall stake in the company largely unchanged. Reckitt said the consolidation would reduce the number of shares in issue by roughly the same proportion as the value being returned.
The proposals will be put to shareholders at a general meeting in London at 8.00am on Tuesday 27 January.
Reckitt said the special dividend would sit alongside, rather than replace, its existing ordinary dividend policy and ongoing share buyback programme.
Any fractional shares created by the consolidation will be pooled and sold. Proceeds of less than £5 per shareholder will be donated to the British Red Cross, with no individual entitlement exceeding the value of a single new share.