Shareholders pay tax on dividends received, as was pointed out to you.
Printable View
Aye, so if they did a buyback over 12 months (like NZM) then if that results in an increase in SP (a big maybe given the wider market turmoil...NZM SP has actually dropped significantly since they started doing their buyback...) then you could sell your shares at the higher price and not pay tax provided you have held them for longer than brightline.
But that would take ages to realise that gain, and there is a risk that the SP could continue to drop despite your $55M funds being used to cannibalise the stock.
I am saying that they have an option to skip all that and pay the $55M to shareholders without it being taxed (like it would if it was a regular dividend). And this should be the option they are looking at as it is a very efficient way of distributing the cash to shareholders and is risk free to the shareholder...
We absolutely pay tax on dividends.
My bad, I can see the error in my understanding lol.
https://www.nzherald.co.nz/business/...UVGIUEA256OVU/
These guys have been trying to buyback as much stock as they can since they were able to start buying on April 4.
The buyback ends on 16 December 2022 (6 months away).
Volumes are so low that in almost 3 months they could only buy back $5M worth. At this rate, even though the NZM is low...because the volume just isn't there, they would be lucky to buy back another $10M worth over the remaining 6 months.
So under current progress they cannot feasibly return the entire $30M via buyback. Not even half of that (hence the special dividend, which I think is a good move).
Sky TV is in the same boat...only the problem will be even bigger because they will be trying to distribute almost double what NZM are doing ($55M). No way can Sky buyback a meaningful amount of shares in a reasonable amount of time.
The best/easiest/most efficient way to distribute that kind of cash to shareholders is clearly the tax free payment option.
Won't sky want to keep some cash for ever-increasing sports rights?