23-11-2010, 03:52 PM
(23-11-2010, 03:07 PM)Nick Wrote: Though if everyone takes scrip dividends, is it similar to no dividend being declared since everyone gets a proportionate amount of shares and the company retains all of its profit ? So technically, there is hardly any difference ?
Not all shareholders - especially among the minority shareholders - will opt for scrip dividend, even though it makes sense to do so in this case. As a result, the major shareholders like the Kuah Family who opt for scrip dividend will invariably inch up in their percentage shareholdings afterwards.
When most of the minority shareholders opt for scrip dividend, more new MTQ shares will be issured. Invariably, some of them will end up selling some shares, as many will take the $0.83/share issue price for the new MTQ shares as their cost reference. So those who are keen to buy into MTQ or increase their stakes (including the Kuah Family) will have a chance to do so by mopping up such shares - likely at slightly lower (than current) prices.