Ardagh legacy investors eye slice of €252m special dividend

Long-standing indirect shareholders in glass and metal containers giant Ardagh Group are poised to share a large part of a $295 million (€252 million) special dividend that will be paid next month as the company is delisted from the New York Stock Exchange.

A special sum will add to the hundreds of millions of euro of mainly debt-funded distributions made by holding companies above Ardagh Group to legacy investors. These include small shareholders who remained on board a precursor of the packaging giant, Ardagh Glass, when it was taken private in 2003 and opted to reinvest part of the cash they received two years later as management used a special-purpose vehicle to purchase all the stock in the business.

Ardagh Group chairman and chief executive, financier Paul Coulson, has been the main beneficiary from the payouts as an effective 36 per cent shareholder of the holding company, called ARD Holdings, which sits above Ardagh Group.

Ardagh Group sold 8 per cent of itself to stock-market investors in an initial public offering (IPO) in 2017, with the rest of the stock retained by ARD Holdings. However, the group is currently offering the stock market investors the opportunity to swap their stock for direct shares in its beverage can-making subsidiary, which floated separately in New York in early August.

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With Ardagh Group set to delist as part of the plan, it announced last week that it is paying a special dividend of $1.25 per share, totalling $295 million. Some $23 million of this will go to the stock-market investors, with the remaining $272 million set to be channelled to ARD Holdings.

ARD Holdings is expected to pay as much as half of the $272 million out to its legacy shareholders, with the rest set to be used to pay down the holding company’s debt, according to industry sources. ARD Holdings has the equivalent of $2.3 billion of borrowings.