3i to return £500m to shareholders

London-listed private equity firm 3i has announced its intention to hand back at least £500 million to shareholders ahead of posting its full-year results.
 
3i said in its pre-close period briefing ahead of results for the full-year to 31 March 2006 that realisations totalled £1.82 billion (€2.6 billion; $3.2 billion) in the eleven months ended 28 February, compared to realisation proceeds of £1.15 billion in the equivalent period last year.
 
In the eleven months ended 28 February 2006, 3i invested £1.18 billion, compared to £843 million in the equivalent period last year.
 
As a result of realisation proceeds, 3i said its board intends to make a further return of cash to shareholders of not less than £500 million. 3i announced at its AGM last July that it would return £500 million to shareholders and has since paid out a special dividend of £245 million and purchased £220 million of shares.
 
“Despite raising our level of investment from £843 million in the equivalent period last year to £1.2 billion this year, as well as investing significantly in the business, we’ve still generated excess cash,” said Patrick Dunne, 3i’s communications director. “That’s the reason we decided to give some of it back as that will enhance our return on capital, which is what we’re focused on delivering,”.
 
Dunne added that a key driver of realisations has been “having a very high quality portfolio”, highlighting its exits from print and document manager Williams Lea and advertising network Focus Media, amongst others.
 
3i’s share price at 1340 GMT today was 952 pence per share, giving the firm a market capitalisation of £5.23 billion.