Earlier this month we announced the proposed sale of BHI to Reckitt Benckiser for £1.926bn and the return of over £1.43bn to shareholders by way of a special dividend of 200p per share.
Special dividend is, in our judgement, the most appropriate way to return money to shareholders. The sale is expected to complete in early 2006 and the dividend will be paid as soon as practical thereafter.
The special dividend will be accompanied by a share consolidation which will reduce the number of shares by approximately the same percentage as the special dividend bears to the market capitalisation of the business. The consolidation ratio will be set out in the circular expected to be sent out early next month and is intended to maintain the comparability of share price and earnings per share.
The price achieved for BHI and the size of the cash will, once the cash return is complete, enhance earnings per share since percentage of shares consolidated is greater than the proportion of group earnings being lost.
We will retain £400m to strengthen the balance sheet and provide flexibility for future investment. We also intend to make a special contribution to strengthen further the pension fund.
We are very pleased to have secured a long term commitment to manufacturing on the Nottingham site which ensures there is no adverse impact on Group costs.
