Why Regal Entertainment is going public: $5 billion to grow business, $5.5 billion in dividend
Regal, the world’s largest maker of personal computers and televisions, is going private.
It plans to raise about $5bn in its latest round of stock buybacks to increase its revenue and earnings per share.
Regal shares rose 2% in afternoon trading on the New York Stock Exchange on Friday.
It said in a statement that the $5billion of dividend payments would be paid in the first half of 2020.
Regals share price jumped 17% on Friday and climbed more than 100% since the announcement.
Regaling a trend of companies with cash flow negative for years, Regal will pay $5b of cash to shareholders in its first-half 2020 dividend.
Reginal, which owns the $2.4 billion Apple and $3.2 billion Dell brands, said the dividend payment would be made to investors in three tranches over five years.
Rega’s cash flow was $2bn in 2016 and $4.5bn this year, and it has been struggling to grow its revenue, and has lost market share to companies such as Amazon and Microsoft.
Regains market value: The $5bill is not a new target for Regal.
The company has already said it would not pay a dividend for three years after 2021.
In a letter last year, Regals chief executive and founder Steve Barr said the company needed to generate cash flow in 2020 to remain competitive.
Regala’s CEO, Scott Peltier, told investors in March that the company’s debt is now at a manageable level, and that the dividend would be in line with the companys historical norm of paying a dividend in 2021.
Regas cash flow is not expected to be in excess of $10bn per annum.
Regalo has said it plans to pay the dividend, even though it has not yet paid the cash dividend for the past five years because of its low market share.