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Basch Report
Jax Daily Record Thursday, Jan. 28, 202105:10 AM EST

Winn-Dixie parent Southeastern Grocers to pay dividend

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The old Jacksonville-based supermarket chain was known for monthly dividends.
by: Mark Basch Contributing Writer

In its heyday, Winn-Dixie Stores Inc. would brag about its dividends.

The Jacksonville-based supermarket chain paid cash dividends on its common stock on a monthly basis, a unique policy that attracted many small investors to the stock.

Winn-Dixie boasted that it set a New York Stock Exchange record by increasing its dividend payments for 54 consecutive years.

However, that changed when the company’s finances sagged in the late 1990s. After holding its dividend payments steady starting in 1998, it slashed the dividends sharply in 2001 and eliminated them altogether in 2004, a year before it started a Chapter 11 bankruptcy reorganization that wiped out shareholders completely.

Now as Winn-Dixie’s parent company prepares to go public this week, it is reinstituting a dividend.

Southeastern Grocers Inc.’s filings for its initial public offering say it intends to pay dividends on a quarterly basis at an annual rate of 2.75% of the IPO price.

The company last week said it hopes to sell its shares at $14 to $16 each in the IPO. If it is priced in the middle at $15, it would be paying 41.3 cents per share in dividends annually.

Southeastern Grocers plans to pay the first dividend in the first full quarter following completion of the IPO.

Although it’s returning to paying dividends, Southeastern Grocers’ shareholders will look nothing like the old Winn-Dixie base, which included mom-and-pop investors who regularly showed up at the company’s annual meetings at its Jacksonville headquarters.

Southeastern Grocers will continue to be controlled by a group of large investment companies who received stock in exchange for debt in a 2018 Chapter 11 reorganization.

The 8.9 million shares sold in the IPO all are owned by those investment firms, which will continue to control almost 80% of all shares outstanding after the sale.

Publicly traded Southeastern Grocers will operate 423 stores under the Winn-Dixie, Harveys and Fresco y Mas banners that produced sales of $8 billion last year.

It’s much different than the company that was a Jacksonville icon for decades but by going public, Southeastern Grocers again will qualify as a Fortune 500 company.

It will be a company Wall Street starts watching again.

 

 

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