WCRX Warner Chilcott $8.50 Divided anyway to play this?

G

gimp570

Warner Chilcott is paying an $8.50 Divided anyway to play this?


maybe with options?? Seems like there has to be a way



ARDEE, Ireland, July 30, 2010 /PRNewswire via COMTEX/ -- Warner Chilcott plc /quotes/comstock/15*!wcrx/quotes/nls/wcrx (WCRX 28.96, +0.70, +2.48%) today announced a recapitalization pursuant to which it intends to incur, subject to market and other conditions, $2.25 billion of new debt to fund a special dividend to Warner Chilcott's ordinary shareholders of $8.50 per share, or approximately $2.15 billion in the aggregate. The new debt is expected to be comprised of a combination of senior secured term loans and additional unsecured debt.

The declaration of the special cash dividend is conditioned on the amendment of the Company's existing senior secured credit facilities to permit, among other things, the incurrence of the additional indebtedness needed to fund the special cash dividend. Warner Chilcott intends to declare the special cash dividend upon the successful amendment of the existing credit facilities and after obtaining debt financing under acceptable terms. The Company currently expects to declare and pay the special cash dividend before the end of the third quarter of 2010.
 
then again ...the play might be to just buy when any company declares that big a Div. ..seems super strong



Quote from gimp570:

Warner Chilcott is paying an $8.50 Divided anyway to play this?


maybe with options?? Seems like there has to be a way



ARDEE, Ireland, July 30, 2010 /PRNewswire via COMTEX/ -- Warner Chilcott plc /quotes/comstock/15*!wcrx/quotes/nls/wcrx (WCRX 28.96, +0.70, +2.48%) today announced a recapitalization pursuant to which it intends to incur, subject to market and other conditions, $2.25 billion of new debt to fund a special dividend to Warner Chilcott's ordinary shareholders of $8.50 per share, or approximately $2.15 billion in the aggregate. The new debt is expected to be comprised of a combination of senior secured term loans and additional unsecured debt.

The declaration of the special cash dividend is conditioned on the amendment of the Company's existing senior secured credit facilities to permit, among other things, the incurrence of the additional indebtedness needed to fund the special cash dividend. Warner Chilcott intends to declare the special cash dividend upon the successful amendment of the existing credit facilities and after obtaining debt financing under acceptable terms. The Company currently expects to declare and pay the special cash dividend before the end of the third quarter of 2010.
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Quote from gimp570:

Warner Chilcott is paying an $8.50 Divided anyway to play this?


maybe with options?? Seems like there has to be a way



ARDEE, Ireland, July 30, 2010 /PRNewswire via COMTEX/ -- Warner Chilcott plc /quotes/comstock/15*!wcrx/quotes/nls/wcrx (WCRX 28.96, +0.70, +2.48%) today announced a recapitalization pursuant to which it intends to incur, subject to market and other conditions, $2.25 billion of new debt to fund a special dividend to Warner Chilcott's ordinary shareholders of $8.50 per share, or approximately $2.15 billion in the aggregate. The new debt is expected to be comprised of a combination of senior secured term loans and additional unsecured debt.

The declaration of the special cash dividend is conditioned on the amendment of the Company's existing senior secured credit facilities to permit, among other things, the incurrence of the additional indebtedness needed to fund the special cash dividend. Warner Chilcott intends to declare the special cash dividend upon the successful amendment of the existing credit facilities and after obtaining debt financing under acceptable terms. The Company currently expects to declare and pay the special cash dividend before the end of the third quarter of 2010.
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I must be missing something. Do companies typically take on additional debt in order to pay out a large dividend?
 
Quote from TheGoonior:

I must be missing something. Do companies typically take on additional debt in order to pay out a large dividend?
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Why not? By taking out debt they pay corporate tax and less money goes to the government and more to the shareholders.
 
i dont know if its a good idea or a bad one but i have never seen this happen before....its pretty amazing $8.50 per share...it will be interesting to see how it acts after the div. payment date...it will be crazy to see it down 8 bucks
 
Quote from gimp570:

i dont know if its a good idea or a bad one but i have never seen this happen before....its pretty amazing $8.50 per share...it will be interesting to see how it acts after the div. payment date...it will be crazy to see it down 8 bucks
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CEO owns 2.9 million shares why not get a pay day? he'll make almost 20 mil from dividends, at the expense of the company of course. Got to love capitalism, ppl will do anything for money.
 
Not to mention they increase their stock prices so better for stock options. Thats my conspiracy theory, stock options, and 20 million bucks in the pocket for the CEO.
 
Any tax experts here? I am guessing that this dividend will be classified as a return of capital, and as such will be tax free. It could be that the CEO sees it this way: The cost of debt capital is very low right now. By doing this maneuver, he is pushing forward the stream of cash flow that the company will be paying investors over its lifetime, and doing it in a tax advantaged way. This increases total value to shareholders. A bird in the hand is worth two in the bush.
 
Quote from 1prometheus:

Any tax experts here? I am guessing that this dividend will be classified as a return of capital, and as such will be tax free. It could be that the CEO sees it this way: The cost of debt capital is very low right now. By doing this maneuver, he is pushing forward the stream of cash flow that the company will be paying investors over its lifetime, and doing it in a tax advantaged way. This increases total value to shareholders. A bird in the hand is worth two in the bush.
More...



THis seems like a smart smart idea......the stock has done nothing but go up since it came out....

what else can be said
 
$8.50 Dividend....



WCRX Warner Chilcott

Pursuant to the rules of The NASDAQ Stock Market, when a dividend is declared in a per share amount that exceeds 25% of a company's stock price, the date on which that company's shares will begin to trade without the dividend, or ex-dividend, is the first business day following the payable date. The Company understands from NASDAQ that, because the $8.50 per share special cash dividend is expected to exceed 25% of the Company's share price, it will apply this rule and the ex-dividend date will be set by NASDAQ as September 9, 2010, the first business day following the payable date for the special cash dividend
 
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