The Vita Group Limited (ASX: VTG) share price is sliding today as the company plans to sell assets, giving more than half the profits back to its shareholders.
Vita is selling its retail information and communication technology segment to Telstra Corporation Ltd (ASX: TLS). The sale is expected to bring in a cool $110 million.
At the time of writing, the Vita share price is trading at 88 cents, 4.86% lower than its previous close.
Let's take a closer look at today's news from Vita.
Vita's asset sale
The Vita share price is sinking on news it plans to sell its Telstra-branded stores and Sprout business for $110 million cash.
The cash consideration is still subject to a net working capital and net-debt adjustment. That will be finalised late this month.
Currently, Vita operates 104 Telstra-branded stores. The deal under which Vita operates the shops took a blow in February when Telstra announced it would fully own all Telstra stores by 2025.
It appears that Vita has run out in front, selling the portfolio, alongside its technological accessory brand, Sprout, to Telstra.
Of the $110 million to be received from the sale, Vita will keep $35 million. The remaining sale value – between $65 million and $75 million – is expected to be handed back to shareholders in the form of a special dividend.
The fully franked special dividend will be worth 39 cents to 45 cents per share and paid in 2 payments.
Vita advised that the $35 million kept in the company's coffers would go towards growing its Artisan Aesthetic Clinics business.
The sale is subject to shareholder approval.
Additionally, Vita has confirmed that none of its employees will lose their jobs due to the sale. They will continue to be employed by the Vita People entity, which will be owned by Telstra.
Vita share price snapshot
Today's dip is just the latest fall for the Vita share price, which has sunk 18.9% since the start of 2021. Vita shares are also 18.2% lower than this time last year.
