AVJennings’ Special Dividend Raises Tax Questions Ahead of Acquisition Scheme
AVJennings Limited has announced a fully franked special dividend conditional on its upcoming acquisition scheme, adjusting the final payout to shareholders. Key dates for dividend payment and scheme implementation are set for August 2025.
- Fully franked special dividend of $0.167 per share declared
- Dividend conditional on scheme of arrangement becoming effective
- Special dividend reduces scheme consideration to $0.488 per share
- Key dates, dividend record date 29 July, payment 6 August, scheme record date 11 August, scheme implementation 14 August
- ATO class ruling on tax implications pending post-implementation
Special Dividend Announcement
AVJennings Limited (ASX – AVJ), a prominent player in Australia's property development sector, has declared a fully franked special dividend of 16.7 cents per share. This dividend is contingent upon the successful implementation of a proposed acquisition scheme by PM Nominees C Pty Ltd, an investment vehicle linked to Proprium Capital Partners and AVID. The announcement marks a significant step in the company’s transition as it prepares for the acquisition.
Impact on Scheme Consideration and Key Dates
The special dividend will effectively reduce the scheme consideration payable to shareholders from the original amount to 48.8 cents per share upon implementation. Shareholders should note the critical timeline – the record date for the dividend is set for 5 – 00pm AEST on 29 July 2025, with payment expected on 6 August 2025. The scheme record date is scheduled for 7 – 00pm AEST on 11 August 2025, and the scheme’s implementation is anticipated on 14 August 2025.
Tax Implications and ATO Class Ruling
In a move to clarify the tax consequences for shareholders, AVJennings has applied for a class ruling from the Australian Taxation Office (ATO). This ruling will provide guidance on the income tax implications related to the special dividend and the disposal of shares under the scheme. However, the ruling is not expected to be issued until after the scheme’s implementation, leaving some uncertainty for shareholders until then. Investors are advised to review the ruling once published on the ATO website.
Strategic Context and Market Implications
This special dividend declaration is a strategic move that aligns with the broader acquisition process, signaling AVJennings’ commitment to delivering value to shareholders ahead of the ownership change. The adjustment in scheme consideration reflects a common practice in such transactions, balancing immediate shareholder returns with the overall acquisition price. Market participants will be watching closely for the scheme’s progress and any further updates on tax rulings that could influence shareholder decisions.
Bottom Line?
AVJennings’ special dividend sets the stage for a pivotal acquisition, but tax clarity remains a key watchpoint.
Questions in the middle?
- How will the pending ATO class ruling influence shareholder tax obligations?
- What are the potential market reactions if the scheme faces delays or complications?
- Could the adjusted scheme consideration impact shareholder acceptance rates?
