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..Dividend: not favoured because of shareholder tax liability.

Great news if you're a Kiwi, but not so great for U.S. ADR holders. For us it's a treated as a dividend and will be taxed as such. From the proxy, "Telecom’s United States tax advisors have advised that a pro rata capital return is generally treated as a dividend for United States tax purposes. Shareholders subject to United States tax will be taxed accordingly on the amount they receive under the Arrangement from the cancellation of their shares. Any additional cash payment received by ADR holders in lieu of fractional ADRs resulting from the adjustment in the ratio of ADRs to Telecom shares should generally be eligible for capital gains tax treatment."

It is understandable since they are a new Zealand company after all, but it's still a shame for us Yanks.


P.S. U.S. shareholder proxies must be received by 8 August so don't sit on yours too long.
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