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3i Infrastructure special dividend and share consolidation
Rishan
Posted: 22 February 2018 09:41:09(UTC)
#1

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Any holders of 3IN considering what to do about this?

The huge special div will take me over the allowance (thanks a lot to NG as well for this) and I really don't want to have to deal with that.

The way I see it the share consolidation is a stealth dividend cut and with the dividend I'm just going to be exchanging capital value for income. Will it make much difference overall if I sell before the ex-d date? Have it read it correctly?
Mr Helpful
Posted: 22 February 2018 10:59:06(UTC)
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Rishan;57711 wrote:

1. The way I see it the share consolidation is a stealth dividend cut and with the dividend I'm just going to be exchanging capital value for income.

2. Will it make much difference overall if I sell before the ex-d date? Have it read it correctly?


1. The company is now smaller (less assets) hence the reduction in the number of shares. And as observed the share price is thus likely to be little affected by the disposals.
So to re-establish the same future total income from the position, an investor could, if so inclined, use their special dividend to buy back more shares.
We will be taking no such action, as 3IN although an excellent long-term holding, seems quite fully valued at present.

2. Probably not in an efficient market.
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Michiel Blomqvist@Citywire on 06/03/2018(UTC)
Rishan
Posted: 22 February 2018 11:30:08(UTC)
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Thanks, Mr Helpful

So basically holders will, roughly, be no better or worse off after the dividend.

I think I'm going to sell to avoid going over the dividend allowance. I was planning to bed and ISA, but that would have to wait until the new tax year and I don't have time with this going ex-d and paid in March! Super frustrating!
john brace
Posted: 23 February 2018 19:21:56(UTC)
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Now on 1% discount. Is this worth adding to - maybe after the payout?
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Mr Helpful on 26/02/2018(UTC)
Mr Helpful
Posted: 26 February 2018 09:42:22(UTC)
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john brace;57775 wrote:
Now on 1% discount. Is this worth adding to - maybe after the payout?


Stated #2 above :-
" to re-establish the same future total income from the position, an investor could, if so inclined, use their special dividend to buy back more shares.
We will be taking no such action, as 3IN although an excellent long-term holding, seems quite fully valued at present."
UNQUOTE


Following a re-assessment over the week-end, have now done a 180 degree volte face, by deciding to maintain a full weighting. This could have been achieved by :-

a) Reinvesting the proceeds after the distribution.
b) Buying the necessary old shares today @ 198p ish.

The consolidation is being effected by retiring shares at 197p ish.
Course b) was chosen at a small premium, for the certainty created.
Having sold some shares previously at 210p, this action seemed proportionate.

The nav step-change highlighted, was also a significant factor in the reconsideration.
Many Thanks
Michiel Blomqvist@Citywire
Posted: 06 March 2018 12:41:16(UTC)
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"Payment of the Special Dividend is not conditional on the Share Consolidation."
page 3 of EGM notification at
https://www.3i-infrastru...i_infra_egm_nom_2018.pdf
1 user thanked Michiel Blomqvist@Citywire for this post.
Slacker on 13/03/2018(UTC)
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