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Suncorp Group Ltd (ASX:SUN) has seen its shares increase by 1.5% to AU$18.65 on Thursday morning, following significant updates in anticipation of its upcoming annual general meeting (AGM). Investors are reacting positively to the news, which revolves around two major resolutions regarding the company’s future following the sale of its banking operations to ANZ Group Holdings Ltd (ASX:ANZ).
Major Return of Capital Proposed
A key highlight of the AGM is the proposal to return up to AU$4.1 billion to shareholders. This decision comes in light of the completion of Suncorp’s banking asset sale. Chair Christine McLoughlin, AM, emphasized that the return will include both a special dividend and a cash payment that will be classified as a Return of Capital.
“Subject to the conditions outlined in this Notice, Suncorp plans to return to shareholders proceeds from the Bank Sale in excess of the needs of the business of up to AU$4.1 billion,” McLoughlin stated. She clarified that the final amount for the special dividend is yet to be determined and that shareholder approval is required for the full potential return.
Share Consolidation to Stabilize Share Price
In addition to the capital return, Suncorp is also seeking shareholder approval for a share consolidation. This strategy aims to maintain a steady share price post-capital return. McLoughlin noted that the company plans to proportionately reduce the total number of ordinary shares, ensuring that each existing share is converted into a smaller number of shares, which will help to stabilize the share price.
While the specifics of the share consolidation have not yet been disclosed, Suncorp indicated that it would involve a conversion based on a record date to be determined by the Board.
