Standard Life Aberdeen PLC (LON:SL.) has said it plans to return £1.75bn to shareholders after the sale of its UK and European insurance business to Phoenix Group, ahead of today’s annual general meeting.
The FTSE 100-listed firm has said it will return £1bn to shareholders by way of a B share scheme, involving the issue of new B shares to shareholders which the company will subsequently redeem for cash.
The company proposed that the B share scheme will be accompanied by a share consolidation to maintain share prices at comparable levels.
The company said the remaining £750mln will be returned by way of a share buyback programme, involving the on-market purchase of Standard Life Aberdeen shares, which will take place after the completion of the B share scheme and share consolidation.
Standard Life Aberdeen said the balance of proceeds from the proposed transaction, combined with existing liquidity within the group, will be used to retire a proportion of company’s outstanding debt of £1.9bn and support investment and other general corporate purposes.
Standard Life Aberdeen announced the £3.24bn transaction in February, and it is expected to be completed in the third quarter of 2018 and the proposed return of capital is expected to take place on 25 June 2018.
Gerry Grimstone, chairman of Standard Life Aberdeen, said: "The cash generated from the sale will enable us to continue to invest in the development of our business and also to return surplus capital to shareholders.”
He added: “Our proposal to return up to £1.75bn by way of a B share scheme and share buybacks represents over 15% of our market capitalisation at close of business on 25 May 2018, and would extend our long-running track record of returning surplus cash to shareholders."