George Weston Ltd, Canada’s largest food processor, has announced it will pay a one-time common share dividend of C$1bn (US$993.4m).
The pay-out represents C$7.74751 per common share, to be paid on 25 January to all common shareholders of record at the close of business on 18 January 2011.
“The corporation’s track record of solid operating performance, combined with significant cash balances and ample liquidity to grow the business, provides the corporation with the opportunity to reward shareholders with a return in excess of our normal dividend,” said Galen Weston, chairman and president of George Weston.
He added: “Capital markets have come through some very turbulent times and the corporation took a conservative position holding excess cash. Now with increased stability in the capital markets and our strong balance sheet, the directors felt that a return of capital was appropriate.”
The Canadian food manufacturer and retailer had built up a sizeable war chest by selling off various divisions within its business, including the 2008 sale of Neilson dairy unit to Saputo for C$465m and a $921m gain from the sale of its US bakeries business to Grupo Bimbo last year.
Speculation had focused on the possibility that the group could use its cash stockpile to take its supermarket arm Loblaw private, expand its grocery operations or paying a special dividend to shareholders.
This year, George Weston has made two acquisitions, Keystone Bakeries and ACE Bakery.