On Tuesday, 7 August 2012, the Board of IHG announced its intention to return US$1 billion of funds to Shareholders via a Special Dividend with a Share Consolidation of US$500 million and a Share Buyback Programme of US$500 million. The Board of IHG today announces it is publishing a circular (the “Circular”) setting out full details of the proposed Special Dividend and associated Share Consolidation and convening a General Meeting to be held at 10.00am on Monday, 8 October 2012 at the Holiday Inn London Bloomsbury, Coram Street, London WC1N 1HT.
It is proposed that the amount of the Special Dividend is US$1.72 (108.4 pence) per Existing Ordinary Share. The Board is proposing to pay the Special Dividend to Shareholders on the Register as at 6.00pm on Monday, 8 October 2012 in sterling and to ADR holders on the ADR register as at 4.00pm (New York time) on Monday, 8 October 2012 (being the close of business on the day before the ADR effective date) in US dollars, in each case as an interim dividend in respect of the financial year ending 31 December 2012. The Special Dividend is expected to be paid to Shareholders and holders of ADRs on Monday, 22 October 2012.
It is proposed that the payment of the Special Dividend be accompanied by a consolidation of the Company's ordinary share capital. The Share Consolidation will replace every 15 Existing Ordinary Shares with 14 New Ordinary Shares. Upon the Share Consolidation becoming effective, the nominal value of the Ordinary Shares will change from 13 29/47 pence per Ordinary Share to 14 194/329 pence per Ordinary Share. Fractional entitlements arising from the Share Consolidation will be aggregated and sold in the market for the best price reasonably obtainable on behalf of the relevant Shareholders. The net proceeds of the sale, after the deduction of the expenses of the sale, are expected to be paid in due proportion to the relevant Shareholders on Wednesday, 17 October 2012. The value of any Shareholder's fractional entitlement will not exceed the value of one New Ordinary Share.
As at the close of business on Tuesday, 11 September 2012 (being the last practicable date prior to the posting of the Circular) when the closing mid-market price per Existing Ordinary Share was 1,619 pence and there were 291,613,946 Existing Ordinary Shares in issue, the total amount of the Special Dividend was equivalent to 6.70 per cent. of the market capitalisation of the Company. The effect of the Share Consolidation will be to reduce the number of Ordinary Shares in issue by approximately the same percentage.