Argo Corporation (TSXV: ARGH, OTCQX: ARGHF) is taking a different approach to rewarding its shareholders this summer by announcing a special stock dividend tied directly to its stake in FoodsUp Inc., a Canadian restaurant supply platform with $108 million in annual revenue in 2024. The move is more than a financial transaction: it’s a signal of how the company is modernizing its portfolio while keeping a sharp eye on creating value for shareholders.
The board at Argo recently declared that each holder of its common shares will receive one Series A Preferred Share for every share held. These Series A Preferred Shares are designed to “track” the company’s 45,932 subordinate-voting shares in FoodsUp Inc. In plain language, if Argo can successfully complete the sale of its FoodsUp stake, shareholders of the new preferred shares will be entitled to a slice of the proceeds, less any taxes and costs linked to the transaction.
Worth noting, Argo and a subsidiary have inked option agreements that, if exercised in full, could generate between $21.6 million and $30.2 million in gross proceeds for the company. If all goes according to plan, these proceeds will flow through to the holders of the Series A Preferred Shares after necessary deductions. However, the nature of these options means the deal isn’t a done deal just yet. The exact amount and timing are uncertain, and the final say rests with regulators at the TSX Venture Exchange.
For investors, important dates are just around the corner. The special stock dividend will be paid out on August 20, 2025. If you buy Argo’s common shares before markets close on that day, you’ll receive the dividend. Shares begin trading on an “ex-distribution” basis the very next day on August 21, meaning new buyers from that point onward won’t get the dividend.
Getting into the finer details, the new Series A Preferred Shares were created expressly for this dividend. They have unique features: they track the FoodsUp stake, pay dividends only if the FoodsUp shares are sold and proceeds distributed, and can potentially be redeemed by Argo. These shares won’t be publicly traded or confer any voting rights. Their primary value comes from the eventual sale of FoodsUp and the resulting payout.
From a tax perspective, the company is clear that shareholders should seek professional advice to fully understand the implications. The anticipated increase in paid-up capital owing to the dividend is so small as to border on negligible, with just $1,000 in total split across all Series A Preferred Shares and roughly $0.000007 per share.
Argo isn’t just dabbling in creative finance. Over the past several years, the company has become a leader in what it calls next-generation city transit. After laying out plans in 2024 to build a vertically integrated transit system for cities, it didn’t take long to prove the concept. Argo’s Smart Routing™ system doubled ridership in Ontario’s Bradford West Gwillimbury by replacing all of the municipality’s fixed bus routes. In parallel, the company hammered out a $10.9 million, year-long deal with the City of Brampton, extending its reach as it works to expand further.
The FoodsUp story is tied to Argo’s broader effort to convert “legacy” assets, acquired before its current leadership and strategic direction, into cash for shareholders. Proceeds from other divestments have already netted $3.25 million, and the FoodsUp sale, once finalized, could be several times that figure.
While executive teams often talk about shareholder value, Argo’s unusual use of a special stock dividend, combined with the deliberate design of the preferred shares, is a practical approach that connects its asset monetization plans back to investors in a direct way. Next steps hinge on the completion and regulatory approval of the FoodsUp option agreements, but if it all lands as intended, Argo’s investors stand to benefit not just from today’s business but from legacy stakes now transformed into tangible value.
