TPG Telecom Ltd (TPG)
Can I have your thoughts on TPG now that the capital return/dividend @ $1.61 has been paid. Would you take up the reinvestment offer they recently released? Thank you
The Latest Q&A
Answer
Hi Ian,
For subscribers who are not close to TPG in plain terms below is an outline of their reinvestment offer:
- The company is returning cash to shareholders as part of a Capital Reduction of $1.61 per share.
- Retail shareholders are being given the option to reinvest some or all of their cash distribution (the $1.61 per share) into newly issued TPG shares instead of taking full cash.
The capital return came about after TPG sold off infrastructure / enterprise assets (to Vocus Group ) generating large cash proceeds (~$4.7 billion). They are returning up to $3 billion to shareholders via the Capital Reduction ($1.61 per share) and using the Reinvestment Plan to partly offset the reduction in “free float” and ensure the share market liquidity remains healthy.
In simple terms from a TPG shareholders perspective you would take up the offer if you feel TPG offers compelling value from both a standalone basis and compared to alternatives on the ASX. At this stage we see better alternatives for income and growth – if we held (we don’t), we’d be taking the cash.
