American Capital shares soar 39 percent on ex-dividend day

By Anurag Kotoky

BANGALORE (Reuters) - Shares of struggling private equity firm American Capital Ltd (ACAS.O) soared as much as 39 percent Thursday from its Wednesday's adjusted closing price, as the shares went ex-dividend.

Last week, American Capital Ltd (ACAS.O) declared a dividend of $1.07 a share, its first since January 2008, to stockholders of record as of the close of business on June 22, with an ex-dividend date of June 18.

The stock of American Capital closed at $3.54 Wednesday on Nasdaq, but on an adjusted basis it closed at $2.47, exactly $1.07 lower, Reuters data showed.

One Wall Street analyst, who did not want to be identified, said some of the buying Thursday could have come from retail investors who were unaware that they would not receive the dividend.

Optimism that the company could have achieved a successful result in negotiations with its lenders may be another factor behind the rally, at least two analysts said.

"We feel very good about their operating position and their negotiation position with their lenders," Fox-Pitt Cochran analyst Matthew Howlett said by phone.

With the asset sales that the company has been pursuing for the last few months, it should be able to pay down a little bit of debt, Howlett told Reuters.

American Capital was to have held a lenders meeting on Wednesday, Reuters Loan Pricing Corporation reported on Tuesday, citing sources it did not identify.

Company officials did not respond to requests for comment.

American Capital, which was removed from the S&P 500 market index .SPX in February, had defaulted on $2.3 billion of unsecured credit arrangements as of March 31, and auditors in March included a going-concern explanatory paragraph in their opinion on its financial statements.

Business development firms like American Capital and Allied Capital (ALD.N), which usually make loans to small businesses in return for equity stakes, have seen their investment portfolios decline, and raising capital has grown increasingly difficult in the financial crisis.

American Capital shares were trading up 29 percent at $3.18, compared with Wednesday's adjusted close, in afternoon trade Thursday.

(Reporting by Anurag Kotoky in Bangalore, Editing by Dinesh Nair)