In this article we explain what B shares are, how they are different to regular A shares, and why companies might issue them to investors.
B shares are a class of company stock with different rights to normal A shares, such as fewer votes or less rights to dividends, and are sometimes used by companies to return capital.
Shareholders in clothing and homewares retailer Next (NXT) are due to receive cash by way of a B share scheme this month.
On 19 December, Next announced it would return just over £421 million of surplus cash by issuing B shares rather than paying a special dividend.
The decision was driven by the need to get the cash to both retail and institutional investors in a timely fashion and in a tax-efficient manner.
The firm will hold a general meeting at 9am on 15 January to approve the scheme, after which it will issue the B shares.
The B shares will be redeemed and cancelled on 16 January, so anyone holding the normal (A) shares at 6pm on 15 January will receive 360p per share in cash in their account by the end of the month.
Read the press release here: https://otp.tools.investis.com/clients/uk/next_plc3/rns/regulatory-story.aspx?cid=115&newsid=2019389
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