Alexon up on share redemption optimism
Smaller capitalisation shares
By Nick Hasell
Friday September 05 2003, 1.00am, The Times
ALEXON hit its best level for 11 years ahead of this month's first-half figures on optimism that the clothing retailer will take the opportunity to redeem its preference shares.
At the end of this month, Alexon has the option to redeem 21.2 million convertible cumulative preference shares at 100p. Given that it has £8.3 million of cash on its balance sheet and no borrowings, analysts believe it is certain to stump up £21.2 million to avoid the dilutive effects of conversion. Seymour Pierce calculates that it will save nearly £400,000 a year on the difference between the interest charge on funding the purchase and the amount it currently pays out in dividends.
It also believes that the reduction in its share capital will boost next