Pico Holdings, Inc. Announces Special Dividend of $5.00 Per Share
October 26 2017 - 4:05PM
PICO Holdings, Inc. (NASDAQ:PICO) announced today that its Board of
Directors has declared a special cash dividend of $5.00 per share,
or approximately $115.7 million. The dividend will be payable to
shareholders of record as of the close of business on November 6,
2017. Payment is expected to be made on or around November
20, 2017.
The Company presently estimates that it will not
have any current or accumulated earnings and profits for 2017, and
that based upon that estimation, no amount of the special dividend
should be taxable as a dividend for federal income tax purposes.
Therefore, based upon the Company’s estimations, the special
dividend should first be treated as a tax-free return of capital,
causing a reduction in the adjusted basis of each shareholder’s
common stock, and the balance, to the extent the amount of the
special dividend is in excess of such shareholder’s adjusted basis,
should be taxed as a gain from the sale or exchange of property.
Such gain should be capital assuming the PICO common stock is held
as a capital asset. The foregoing discussion of the
tax treatment of the special dividend is general in nature, is not
intended for any particular shareholder and is not intended as tax
advice. Each shareholder is strongly encouraged to
consult its financial and tax advisors regarding the appropriate
treatment of the special dividend and the corresponding tax
consequences that may be relevant to such shareholder’s particular
circumstances, because the tax treatment is complex and uncertain
at this time, and the actual current or accumulated earnings and
profits of the Company for 2017 could vary from the Company’s
present estimate and such variance could result in different
consequences to a particular shareholder.
Max Webb, Chairman and CEO commented:
“With the sales earlier this year of a portion
of our long-term storage credits, and our investment in UCP, Inc.
and, more recently, the monetization of our position in
Century Communities, Inc., we have accumulated a significant amount
of cash. We have recently completed a comprehensive study of
the related tax consequences of these dispositions, including
estimating our current and accumulated earnings and profits. As a
result of this study, the Company has concluded it is possible to
return capital to shareholders during 2017 in what it believes to
be a highly tax-efficient manner. The Board is pleased to declare
this special cash dividend and return capital to shareholders in
accordance with our stated business plan. Following the
payment of the special dividend, we believe we will have ample
working capital to meet the ongoing operating needs of our business
and our obligations for the foreseeable future.”
About PICO Holdings, Inc.
PICO Holdings is a diversified holding
company. The Company recently announced that the Company's
Board of Directors had engaged JMP Securities LLC as PICO’s
exclusive financial advisor and Cooley LLP as PICO’s legal counsel
to explore strategic alternatives to further enhance shareholder
value. The intention of the engagements is to evaluate potential
alternatives such as the sale of the Company, a merger, a business
combination, or a sale, license or disposition of assets of the
Company.
OTHER INFORMATION
At September 30, 2017, PICO Holdings, Inc. had a
market capitalization of $386.5 million, and 23,146,823 shares
outstanding.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press
release (other than statements of historical fact) are
forward-looking statements. Words such as "believe," "estimate,"
"expect," "intend," "anticipate," "will," "could," "may," "should,"
"plan," "potential," "predict," "forecast," "project," and similar
expressions and variations thereof identify certain of such
forward-looking statements, which speak only as of the dates on
which they were made. Although forward-looking statements are made
based upon management's expectations and beliefs concerning future
developments and their potential effect upon the Company, a number
of factors could cause the Company's actual results to differ
materially from those set forth in the forward-looking statements.
Such factors may include uncertainties associated with our estimate
of current and accumulated earnings and profits and our
expectations regarding our future working capital needs, as well as
the uncertainties and risk factors discussed in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2016 and in our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2017,
each filed with the Securities and Exchange Commission. There can
be no assurance that future developments will be in accordance with
management's expectations or that the effect of future developments
on the Company will be those anticipated by management.
This news release was distributed by
GlobeNewswire, www.globenewswire.com.
CONTACT:Max WebbChief Executive Officer858 652
4114
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