The wireless carrier said that as a legacy of its demerger from UK incumbent BT Group Plc in 2001, the company has more than a million shareholders with fewer than 600 shares. They represent more than 63% of shareholders by number, but own only 3.5% of its total share capital.
mmO2 said that in many cases, the cost to send dividend checks to its small shareholders is more than the amount of dividend they are receiving. Moreover, these investors could only sell their shares at disproportionate cost.
To overcome the problem, it plans to offer its shareholders the opportunity to swap their shares on a one-for-one basis for shares in O2 Plc, with the option of electing to receive cash. It hopes to buy back 300 million shares in this way.
mmO2 said most of its larger US investors own shares directly, rather than in the form of ADRs, so it plans to delist them from the NYSE. This will also enable it to eventually avoid the high cost of filing statements with the SEC.
