TPG (ASX:TPM) special dividend announced

TPG Telecom (ASX: TPM) has announced its special dividend as part of its merger with Vodafone Australia.

What is TPG?

TPG is one of Australia’s largest broadband and mobile phone providers, with around 2 million broadband subscribers. In 2018, TPG planned to merge with the owner of Vodafone Australia, Hutchison Telecommunications (ASX: HTA), in a potential $15 billion deal, with legal proceedings related to the merger ongoing.

What special dividend has TPG announced?

TPG has got a big merger in the works with Vodafone Australia. As part of the merger, TPG will pay its shareholders a special dividend to ensure that the two companies are the right size so that each shareholder base owns the agreed amount of shares of the new business.

But we’ve been waiting a while to see how much TPG will pay as a special dividend to shareholders to ensure that TPG is worth the right amount at the date of the merger.

Today TPG has announced that it expects its dividend to be in the range of $0.49 per share to $0.52 per share. That dividend will be fully franked.

The record date for the special dividend will be 1 July 2020.

However, due to the ongoing risks of COVID-19, shareholders won’t be able to physically attend the meeting. Instead, they can lodge a directed proxy in advance of the meeting.

I think it’s exciting for TPG shareholders that the merger is now very close, but the special dividend alone wouldn’t make me buy. I’d want to think about how good the combined business will be. Will be it be able to challenge Telstra (ASX: TLS) and Optus?

Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned. 

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