GO
Loading...

Schwab Shares Leap on News of $1.2 Billion Special Dividend

AP
Monday, 2 Jul 2007 | 2:27 PM ET

Brokerage and financial advisory firm Charles Schwab said it will use cash it received from selling off private wealth unit U.S. Trust to pay a special dividend and repurchase $2.3 billion in shares.

Shares of the brokerage and financial advisory firm jumped more than 7% on the news Monday.

As part of a $3.5 billion recapitalization plan, Schwab will pay a $1-per-share dividend on Aug. 24 to shareholders of record at July 24, returning about $1.2 billion in the payout.

The company will also repurchase through a modified auction process up to 84 million shares for about $2.3 billion. The move will not increase Chairman and CEO Charles Schwab's ownership stake of 18 percent.

At the same time, Schwab plans to take on $750 million in debt, recapitalizing its balance sheet.

On Monday, Schwab closed the sale of its U.S. Trust unit to Bank of America.

  Price   Change %Change
SCHW
---

Featured

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video