Dec. 1 (Bloomberg) -- Regal Entertainment Group, the largest U.S. cinema operator, declared an extraordinary dividend of $1.40 a share payable Dec. 30, the day before Bush-era tax cuts are set to expire.
The one-time dividend will cost about $215 million, David Ownby, chief financial officer, said today in an interview. The company’s largest shareholder, billionaire Philip Anschutz, stands to collect more than $100 million based on his controlling stake in the company.
The expiring Bush-era tax cuts, which included a reduction in the levy on dividends to 15 percent, were a factor in the decision, Ownby said. Regal, operator of 6,703 screens, has paid four special dividends since 2002, according to Ownby and data compiled by Bloomberg. The Obama administration and Congress are negotiating over a possible extension of the lower rate.
“At this point in time, we felt like the best use of this cash was to return value to our shareholders,” Ownby said.
The dividend is payable to shareholders of record on Dec. 20, according to a statement today. The regular quarterly payout will increase 17 percent to 21 cents a share from 18 cents previously, the Knoxville, Tennessee-based theater operator said in the statement. The payment increase will cost the company about $4.5 million a quarter, Ownby said.
Regal rose 30 cents to $14.06 after the announcement and the close of regular New York Stock Exchange composite trading. The stock gained 26 cents to $13.76 at 4:15 p.m.
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