BHP has announced the result of their share buy-back.
BHP bought back 147 million shares, which represents 4.4 per cent of the issued share capital . The final price for the Off-Market Buy-Back has been set at A$40.85 per share, which represents a discount of 14 per cent to the market price of A$47.4985 per share.
Due to the strong demand, a scale back of tenders was required. Shareholders who tendered their shares at a 14 per cent discount and/or as final price tenders will have a priority allocation of 125 shares bought back before the scale back is applied. As a result of the 78.27 per cent scale back, successful shareholders will have 21.73 per cent of their shares tendered in excess of the priority allocation bought back.
The buy-back price of $40.85 a share comprises $0.28 in capital and $40.57 as fully-franked dividend. The franking credit amounts to $17.38, giving the buy-back a value of $58.23 a share to a tax-free super fund in pension phase. This compares to today's closing price of $49.55.
For capital gains tax purposes, the deemed capital proceeds are $9.31, being the $0.28 capital component plus $9.03, which is the excess of the tax value over the buy-back price.
