FRANKFURT, June 7 (Reuters) - Small shareholders at Deutsche Telekom have largely shunned a proposed dividend to be paid in shares, which the telecom operator has proposed to save cash it needs for investment.
Less thank 5 percent of the 800,000 Deutsche Telekom shareholders that are served by German securities service dwp Bank have asked for a dividend payment in shares, a spokesman for the bank said on Friday.
He could not say how many shares were held by the retail investors that have opted for a stock dividend.
The former German monopoly, which wants to preserve cash as it plans to invest 6 billion euros ($7.9 billion) in the next three years in broadband, has given its shareholders the option to take the 2012 dividend of 0.70 euros per share in stock or in cash.
Deutsche Telekom will give a breakdown on Monday of the number of shareholders preferring cash to payment in shares.
A Deutsche Telekom spokesman declined to comment on the result ahead of Monday's statement but said the company has about 1.6 million shareholders, including institutional investors.
As an incentive to take the stock, Deutsche Telekom is offering the payout in new shares priced at a 2 percent discount.
For every 12.5 shares held prior to the dividend approval on May 16, shareholders who choose not to take cash can receive one extra share.
Earlier this week the German state said it wanted the cash dividend on its 14.96 percent stake in the company.
If all shareholders were to opt for cash payments, it would cost the company around 3 billion euros.
Deutsche Telekom has cut its dividend for the next two years by almost a third to an annual 0.50 euros per share. ($1 = 0.7579 euros) (Reporting by Alexander Huebner, writing by Harro ten Wolde; Editing by Elaine Hardcastle)