Ann: Half Yearly Report and Accounts, page-13

As hard as it is to believer, the exact figure for the DRP participation rate from the last special dividend is only 55%.

In other words, 45% of shareholders, unbelievably, chose to ignore immediate profit by opting for cash dividend, instead of in-the-money shares allocation.


By having the DRP fully underwritten, the board knows that the shareholder base will increase after the special dividend. By adding the number of institutional shareholders in the share register, the board is effectively trying to make the stock more liquid and more covered by the analysts.

My guess for the real reason for ARB board declaring special dividend is to facilitate Roger Brown, Andrew Brown and John Forsyth in selling some of their shareholdings.


By first receiving this special dividend in the form of shares, they are also entitled to the franking credit. They then sell these allocated shares on the market, at a price higher than the allocated price, again gaining some extra dollars.

Not only did they manage to sell some shares, but they did it in such a way, that it doesn't look bad in the stock market. Imagine if they just do a straight sell, it will look as if they are not confident in the future of the company and won't look as good as the special dividend route.

With the special dividend, it will look like they only sell their newly allocated shares, but the end result is the same, their proportional ownership of the company is reduced.

With the benefit of hindsight, so far, their past decisions to sell down their shareholdings haven't been that great. Imagine how much money they will have if they are like the Wilsons family in REH and never sell down?