Consumer Discretionary

67% dividend yield up for grabs after Ardent Leisure completes $1.1bn Main Event sale

Thu 30 Jun 22, 12:14pm (AEST)
Theme park ride
Source: Chris Slupski

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Key Points

  • Ardent Leisure has completed the $1.1bn sale of its US Main Event business
  • The company will distribute $455.7m or 95 cents per share to shareholders
  • This represents a massive 67% dividend yield based on a $1.40 share price
  • Investors will be eligible for the distribution if they hold Ardent Leisure shares on or before Monday, 4 July

Ardent Leisure (ASX: ALG) shares briefly rallied 9.6% to a 3-month high in early trade after announcing that the sale of its US business, Main Event Entertainment, was successfully completed overnight. 

Main Event was sold to US entertainment and restaurant business Dave & Busters for $1.1bn cash.

As outlined on Wednesday, Ardent confirmed it will distribute $455.7m (95 cents per share) to shareholders in the form of:

  • A return of capital of $221m (46 cents per share)

  • An unfranked dividend of $234.7m (48.9 cents per share)

Based on Wednesday's open of $1.40, the 95 cents distribution represents a massive 67% yield.

The capital return and special dividend will work the same as dividends normally do. Investors will be eligible for the distribution if they hold Ardent Leisure shares on or before Monday, 4 July.

The stock will go ex-dividend on Tuesday, 5 July and paid out on Wednesday, 13 July.

Don't get caught off guard or act surprised when Ardent Leisure shares dip (for a good reason) next week.

Theme parks in focus

Management said that the remaining funds from the Main Event sale will be used to pay off debt and support its theme parks business.

This includes investment in new major rides and attractions and redevelopment of existing attractions.

"Further investment in this business will better position it to benefit from expected increases in leisure spending, including as a result of increased levels of interstate and international travel to Queensland following the suppressed levels experienced during the COVID-19 pandemic," commented Chairman Dr Weiss.

Ardent Leisure Group Ltd (ASX ALG) Share Price - Market Index
Ardent Leisure price chart

 

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Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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