Brambles shareholders are in line for a $2.7 billion windfall after the global logistics company announced the sale of plastic containers business IFCO.
Shares in Brambles were initially up more than six per cent on Monday following a statement by the pallets and container company that it will return the bulk of the proceeds from the sale to shareholders.
Abu Dhabi Investment Authority subsidiary Triton and Luxinva have agreed to buy IFCO – which provides boxes used to transport fruit, vegetables, meat and bread – for $US2.5 billion ($A3.5 billion), with the deal expected to complete before the middle of 2019.
Brambles will hand over as much as $A2.73 billion of the cash to shareholders in the form of an additional 29 cents-per-share payment and a buyback of up to $A2.31 billion.
‘We are pleased today to announce the sale of IFCO which we believe delivers greater value for shareholders, including a significant return of cash proceeds to shareholders,’ Brambles chairman Stephen Johns said.
The company said the pro-rata return of cash was subject to obtaining an ATO ruling and shareholder approval.
The Brambles board last week declared an interim dividend of 14.5 Australian cents per share, 65 per cent franked.
The company’s shares were still up 2.46 per cent to $11.88 at 1130 AEDT on Monday, having hit its highest level since January 2017.