MS makes monster payout

$32bn special dividend to shareholders

By John Oates • Get more from this author

Posted in Financial News, 21st July 2004 08:23 GMT

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Microsoft is paying a special dividend - giving investors a one-off payment of $3 per share, a total of $32bn. The company delayed getting rid of its cash pile because it was worried about potential costs connected to its anti-trust actions which have now been mainly settled.

Microsoft will also spend $30bn on buying back its own shares and is doubling the regular dividend - at a cost of $14bn.

Steve Ballmer, chief executive, said: "We are confident in our long-term ability to grow revenue, profits and shareholder value through our innovation and execution. We have been successful in addressing a significant portion of our ongoing legal exposure, and all seven of our businesses are growing."

One of the biggest winners from the decision is Bill Gates - he owns about 11 per cent of the company, so will receive about $3bn from the special dividend. He is giving the money to the Bill and Melinda Gates Foundation which works to improve "global health, education, public libraries and supporting at-risk families in Washington state and Oregon".

Gates said: "The pledge today is recognition that our world, the nation and our region — now more than ever — can and should dramatically improve equity in health, education, and access to information and human services for vulnerable families."

Microsoft employees will also see changes to their shareholdings. These will be increased to make up for the payout - which in theory will reduce the value of the stock.

Microsoft shares rose five per cent in after-hours trading on the news. More details on the Microsoft site here. ®