Quilter plc (QLT) announced the opening of an odd-lot offer to shareholders owning less than 200 ordinary shares in the company:
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The offer was approved at the company's annual general meeting on 18 May 2023.
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The company previously carried out an odd-lot offer in 2020 for shareholders holding fewer than 100 shares. However, Quilter still has more than 200 000 shareholders on its share register of which ~134 000 hold less than 200 shares. This means that 67% of shareholders hold only 1.21% of the company's total ordinary shares in issue.
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This is a consequence of the company having been unbundled from Old Mutual in 2018, leading to many Old Mutual shareholders holding a comparatively small stake in Quilter.
Shareholders may:
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Sell their odd-lot holding for 2008.91 ZAR cents per share - being a 5% premium to the five-day VWAP of a QLT share at the close of business on Friday, 20 October 2023 (default action); or
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Elect to keep their shares.
NB! The default action is to sell. It is ver y impor tant that shareholders who wish to retain their QLT plc shares specifically elect to do so.
If an investor accepts the offer or makes no election to retain their shares (default action), the subsequent odd-lot cash consideration will be distributed as a foreign return of capital. It will therefore not be regarded as a foreign dividend for South African Dividends Tax purposes but as proceeds on the disposal of the QLT shares. An election to retain their shares will have no tax implications for the shareholders.
FNB Stockbroking and Portfolio Management View
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We prefer Option 1. The stock has shown decent gains recently and shareholders with a very small financial exposure will be able to exit their position without incurring additional costs.
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This transaction makes business sense for Quilter as it will be able to cut costs by reducing its shareholder base as well as eliminate the complexity of managing many odd-lot holders.
