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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 £350 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 manoevre 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
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 £350 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 manoevre 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
View full details