Diageo to go for another share buy back
Diageo, the Smirnoff vodka to Guinness drinks group, is planning to return GBP1.0 billion of cash to its shareholders by
way of a share buy-back programme. The group believes that share buy-backs are a more tax-efficient way of returning cash to shareholders than paying them a special dividend. In October this year Diageo will receive GBP1.5 billion from the sale of the Burger King chain to a venture capital consortium of Texas Pacific, Bain Capital and Goldman Sachs.
The share buy-back programme will come as a relief to some investors who feared that Diageo would take the proceeds to bolster its wine business. Wine valuations are fairly high at the moment. Earlier in the year, Diageo sold its Pillsbury food business to General Mills of the US.0 billion, earnings per share 43..
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