The shareholders thus have the choice of receiving their dividend in shares or in cash. Note a special case. In 2014, LVMH decided to make a special distribution in the form of Hermes shares after giving up its takeover bid for the group.
The special dividends
A company may decide to pay an "outstanding" dividend representing several years of exceptional results or annual results. A group making a significant capital gain on disposal of an asset or a subsidiary may repay the shareholders. This dividend, non-recurring, do not therefore constitutes a signal for the future.
The special dividend may be motivated by the objective of the shareholder to accelerate its deleveraging. With the "debt push-down" a parent makes borrow its subsidiary to pay a special dividend, the risk of damaging its financial structure.
In 2015, frozen PICARD paid to its shareholder, Lion Capital investment fund a special dividend of € 602 million representing 4.5 times its annual profit. This payment caused a 88% increase in financial debt of PICARD and a sharp deterioration in its rating.