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Warner Chilcott to Pay 23% Special Dividend

Warner Chilcott plc (WCRX) reported that as a result of its previously announced process to explore strategic alternatives, its board of directors has approved a series of transactions intended to enhance shareholder value. More specifically, WCRX’s board of directors has approved a recapitalization transaction, a new dividend policy for regular cash dividends and the renewal of the Company’s existing share redemption program.

Pursuant to the recapitalization, the Company intends to incur, subject to market and other conditions, $600 million of new debt that will be used, together with available cash, to fund a special dividend to Warner Chilcott’s ordinary shareholders of $4.00 per share, or approximately $1.0 billion in the aggregate. WCRX is trading at $17.56 for a special dividend yield of 23%.  WCRX has an equity summary score of 9.8 out of 10 for a VERY Bullish outlook.

The new debt is expected to be comprised of new senior secured term loans under the Company’s existing senior secured credit facilities. The declaration of the special cash dividend is conditioned on the amendment of the Company’s existing senior secured credit facilities to permit, among other things, the incurrence of the additional indebtedness needed to fund the special cash dividend. Warner Chilcott intends to declare the special cash dividend upon the successful amendment of the existing credit facilities. The Company currently expects to declare and pay the special cash dividend before the end of the third quarter of 2012.

Warner Chilcott also announced today a new dividend policy under which it expects to pay a total annual cash dividend to its ordinary shareholders of $0.50 per share in equal semi-annual installments of $0.25 per share. Any declaration by the board of directors to pay such future cash dividends, however, will depend on Warner Chilcott’s earnings and financial condition and other relevant factors at such time. The first semi-annual dividend is expected to be paid, subject to declaration by the board of directors, in the fourth quarter of 2012.

Warner Chilcott plc, a specialty pharmaceutical company, focuses on the development, manufacture, and promotion of branded pharmaceutical products in women’s healthcare, gastroenterology, dermatology, and urology segments in North America and western Europe markets.

Spectrum Brands Announces Special Dividend

Spectrum Brands Holdings, Inc.(SPB) is initiating a $0.25 per share quarterly common stock dividend starting in fiscal 2013 – expected to be paid in March, June, September and December each year – and declared a one-time special dividend of $1.00 per share to be paid on Sept. 18 to shareholders as of Aug. 27. Shares are trading at $36.41 for a one-time special dividend yield of 2.75%.

Spectrum started out making Rayovac batteries in 1906, and now controls a portfolio of consumer-product brands from Remington shavers to Cutter bug spray. In late December, the company completed its $140 million acquisition of FURminator, which makes dog and cat grooming tools and accessories.

For the quarter ended July 1, Spectrum reported a profit of $58.7 million, or $1.13 a share, up from $28.6 million, or 56 cents a share, a year earlier. Excluding restructuring, acquisition and other items, earnings rose to 78 cents a share from 66 cents.  Sales edged up 2.5% to $824.8 million.

Company profile:

Spectrum Brands Holdings, Inc (SPB,) a member of the Russell 2000 Index, is a diversified, global consumer products company and a leading supplier of batteries, shaving and grooming products, personal care products, small household appliances, specialty pet supplies, lawn & garden and home pest control products, personal insect repellents and portable lighting. Helping to meet the needs of consumers worldwide, our Company offers a broad portfolio of market-leading, well-known and widely trusted brands including Rayovac®, Remington®, Varta®, George Foreman®, Farberware®, Black & Decker®, Russell Hobbs®, Toastmaster®, Tetra®, Marineland®, Nature’s Miracle®, Dingo®, 8-in-1®, FURminator®, Littermaid®, Spectracide®, Cutter®, Repel®, Hot Shot® and Black Flag®. Spectrum Brands Holdings’  products are sold by the world’s top 25 retailers and are available in more than one million stores in approximately 120 countries. With 6,000 employees in 43 countries, Spectrum Brands Holdings reported fiscal 2011 net sales of approximately $3.2 billion.

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