BZW scrip scheme brings cash premium

BZW's latest tweaking of its enhanced scrip dividend brainchild has ensured a small premium for shareholders in Johnson Matthey who took the stockbroker's offer of cash for their scrip dividends.

Shareholders in the precious metals group will receive 10.77p, marginally above the enhanced scrip dividend value of 10.65p. The ordinary dividend was 7.10p. Yesterday the shares closed up 4p at 461p.

Under the scheme, BZW acted as agent, selling the shares on a 0.2 per cent commission basis. 'At the start this was the great unknown but it has turned out well,' Michael Perry, of BZW corporate finance, said.

'We had no idea what the take-up might be. You could be left with a 5 per cent stake in a company that everyone knows you've got.

'Cynics refused to believe that we would make any sort of premium and the idea wasn't fully understood. It's a shame because more shareholders could have made money.'

The enhanced scrip dividend, devised to save on advance corporation tax, was launched by BAT Industries in March. BZW has extended the refined scheme, which involves the auction of shares, to Rank, Automated Security Holdings and Scapa.

RTZ, which first used the enhanced scrip dividend for its final dividend last year, will offer it again for this year's interim dividend.