* To pay stock dividend on 1.62 bln shares, 38 pct of total
* Deutsche Telekom will issue 130 mln new shares
* Total cash dividend amounts to 1.87 bln euros (Add CFO comment, detail, background)
FRANKFURT, June 10 Deutsche Telekom shareholders owning about 38 percent of its total capital opted to take their 2012 dividend paid in shares, the company said on Monday, giving the former monopoly more money to play with on investment.
Deutsche Telekom, which wants to preserve cash as it plans to pump 6 billion euros ($7.9 billion) in the next three years into broadband services, had given shareholders the option of taking the 2012 dividend of 0.70 euros per share in stock or in cash.
Though more common in other European countries such as the United Kingdom and the Netherlands the option for a stock dividend is a novelty in Germany, where shareholders like to receive their dividend in cash.
"This shows our shareholders have confidence in Deutsche Telekom's strategy," said the company's Chief Financial Officer Timotheus Hoettges. "The take-up exceeds our expectations."
As an incentive to take the stock, Deutsche Telekom said it had offered 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 will receive one extra share.
Deutsche Telekom said it will issue 130 million new shares, while it will pay out 1.87 billion euros to the shareholders who wanted the dividend in cash.
Had all Deutsche Telekom's shareholders chosen a cash payment, it would have cost the company around 3 billion euros.
Last week, the German state decided in favour of a cash dividend on its 14.96 percent stake in the company. ($1 = 0.7564 euros) (Reporting by Harro ten Wolde; Editing by Christoph Steitz and Patrick Graham)