Armstrong World Industries (Lancaster, Pa.) on Tuesday said its board of directors is "considering" making a special cash dividend to shareholders of about $500 million, according to a corporate release. To finance the payout, Armstrong would use a cash surplus and take on an additional $250 million in debt.
The payout would equal about $8.55 per share and is contingent on whether the company receives consent from lenders and can obtain financing. The flooring manufacturer expects any dividend to be declared and paid before May 1.
"This approach is a proactive way to efficiently allocate the company's capital and return value to shareholders at time when conditions in the capital markets are favorable," said Matt Espe, president and CEO at Armstrong.
Before the company entered bankruptcy in 2000 to resolve liabilities related to asbestos, Armstrong regularly paid quarterly dividends, according to LancasterOnline.com. Since emerging from bankruptcy in 2006, it has paid special dividends twice.
LancasterOnline.com reported that most of Armstrong's stock today is held by three groups: TPG Capital, Fidelity Management and a trust formed to pay asbestos-related claims against the old Armstrong corporation.
