Retailer Saks Incorporated has announced that its Board of Directors has adopted a resolution expressing the Board's intention to declare a special cash dividend of $4 per common share immediately following the closing of the sale of the company's Northern Department Store Group ("NDSG") to The Bon-Ton Stores Inc.
The company expects to complete the NDSG sale by March 13th 2006, which will generate for the company after-tax cash proceeds of approx. $1.0 billion.
The Board's intention is that the special dividend, when declared, would be payable on May 1st 2006 to shareholders of record as of April 14th 2006. When declared, the dividend payout would total approx. $550 million based on the current shares outstanding.
Douglas Coltharp, Chief Financial Officer of the company, said, "We believe this special dividend will represent an efficient and straightforward way to distribute to all of our shareholders a substantial portion of the NDSG sale proceeds."
Coltharp added, "Following the sale of NDSG and the declaration and payment of the $4 per share special dividend, we expect to have approx. $400 million of invested cash. We plan to maintain a portion of this cash to provide flexibility for further balance sheet refinements, to invest in our core businesses, and to cover any transition costs related to the disposition of Proffitt's/McRae's and NDSG.”
“Our current plan is to target any residual cash for additional shareholder distributions in the form of share repurchases, an additional dividend, or a combination of both. The pool of funds available for future shareholder distributions may be augmented by the net proceeds from any monetization of our Parisian business resulting from the strategic alternatives process currently underway," he added.
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