Late on Friday, SBC trumped BZW with a higher bid for scrips offered by BAT Industries in place of normal dividends. SBC has bid cash equal to 33.2p per ordinary BAT share - 98 per cent of the new scrip's value - against BZW's earlier offer of 32.2p.
BZW is currently offering the same 95 per cent of scrip value to those taking shares in lieu of cash dividends at Redland, BICC and Forte. It has already completed schemes for RTZ and Coats Viyella.
BZW has agreed to step aside in favour of the Swiss deal for the BAT scrip dividend, even though it has already received legally binding acceptances of its lower offer from more than 32,000 small shareholders.
BZW has the compensation of keeping a pounds 5m fee from BAT for its work in setting up the scheme, which saves the tobacco group nearly pounds 100m on its advance corporation tax bill.
Many large companies with high overseas profits have offered new scrip shares - which do not attract ACT - up to 50 per cent higher in value than the normal cash dividend.
Institutional shareholders can sell the new shares in the market and their cash proceeds will hardly be dented by broking commissions. BZW and now SBC are giving small shareholders the chance to realise cash free of commission.
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