The Charles Schwab Corp. to restructure

Special dividend will return $1.2 billion to shareholders

The Charles Schwab Corp. announced plans for a $3.5 billion capital restructuring.
Under the plan, the San Francisco-based discount brokerage will pay a $1 per share special dividend that will return $1.2 billion to stockholders.
The plan follows the completion of Sunday’s sale of U.S. Trust Corporation, which generated after-tax proceeds of $2.7 billion. (InvestmentNews, July 2)
As part of the plan, the special cash dividend is payable Aug. 24 to shareholders of record as of July 24.
The company said it also plans to repurchase 84 million shares, valued at about $2.3 billion, by way of a modified Dutch auction tender offer and separate stock purchase agreement with chairman and chief executive Charles Schwab.
Mr. Schwab will sell up to 18 million shares under the agreement and will maintain his interest in the company at its current level of 18%.
The tender offer, which will begin today, will be for up to 84 million shares, representing approximately 7% of the company’s outstanding common stock, with the right to purchase up to an additional 25 million shares, subject to certain limitations and legal requirements.
Under the terms of the tender offer, stockholders will have the opportunity to tender some or all of their shares at a price of $19.50 to $22.50.