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Case
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Reference no. 294-002-1
Subject category: Finance, Accounting and Control
Authors: Paul Stonham (ESCP Business School London)
Published in: 1994
Length: 18 pages
Data source: Published sources
Topics: Dividend policy; Share repurchases; Financial strategy; Excess corporate cash; Taxation of share repurchases; Models of share situation
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Abstract

This case study concerns cash distributions by corporations to their share-holders in the form of repurchases or share buy-backs. They are much more common and familiar in the United States than in the United Kingdom. It is an aspect of corporate finance policy; share repurchase can be used as an alternative to cash distribution by dividend. The present case relates to the 1993 GBP350 million share repurchase by Reuters, the international news and financial information group, in the UK. The cash distribution was deemed successful; shareholders over-rendered nearly seven times; the share price immediately went higher, and the financial press was approving. The case study examines theoretical and practical aspects of this innovative financial manoeuvre in the UK.
Location:
London
Industry:
Stock market
Size:
GBP866 million capital employed
Other setting(s):
1993
Teaching note
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Reference no. 294-002-8
Subject category: Finance, Accounting and Control
Authors: Paul Stonham (ESCP Business School London)
Published in: 1994
Length: 3 pages
Data source: Published sources
View full details

About

Abstract

This case study concerns cash distributions by corporations to their share-holders in the form of repurchases or share buy-backs. They are much more common and familiar in the United States than in the United Kingdom. It is an aspect of corporate finance policy; share repurchase can be used as an alternative to cash distribution by dividend. The present case relates to the 1993 GBP350 million share repurchase by Reuters, the international news and financial information group, in the UK. The cash distribution was deemed successful; shareholders over-rendered nearly seven times; the share price immediately went higher, and the financial press was approving. The case study examines theoretical and practical aspects of this innovative financial manoeuvre in the UK.

Settings

Location:
London
Industry:
Stock market
Size:
GBP866 million capital employed
Other setting(s):
1993

Related

Teaching note
-
Reference no. 294-002-8
Subject category: Finance, Accounting and Control
Authors: Paul Stonham (ESCP Business School London)
Published in: 1994
Length: 3 pages
Data source: Published sources
View full details