Trailer Magazine


Woolworths completes $1.7B buy-back

  • Posted on Tuesday 28th, May 2019.

Supermarket company, Woolworths Group, has completed its $1.7 billion off-market buy-back.

Woolworths Group Chairman, Gordon Cairns, said the business is pleased with the outcome and strong level of investor interest.

“Completion of the off-market buy-back fulfils the Board’s commitment to return the proceeds from the Woolworths Petrol sale to shareholders,” he said. “Following the buy-back, the Woolworths Group balance sheet will remain strong and allow sufficient flexibility for future growth as the Board remains focused on long-term shareholder value creation.”

The shares brought back will subsequently be cancelled by Woolworths Group.

Due to strong demand for the buy-back, a 84.68 per cent scale back of offers was reportedly required.

“The scale back was structured to minimise disadvantaging shareholders with small holdings,” Woolworths said in a statement.

“Subject to exclusions due to any minimum price conditions, eligible shareholders who offered their shares at a 14 per cent discount and/or as a Final Price Offer had a priority allocation of 180 shares (or lesser number) bought back before the scale back was applied.

“Successful eligible shareholders will have 15.32 per cent of their shares offered (in excess of the priority allocation of 180 shares) bought back. If less than 180 shares were offered, all of these shares would be bought back. Shares offered at discounts of 10-13 per cent and offers conditional upon a minimum price above the buy-back price were not bought back.”

The ATO class ruling, according to Woolworths, is expected to confirm that the $24.15 dividend component of the buy-back price will be treated as a fully franked dividend for Australian tax purposes only and that, for Australian capital gains tax purposes, the deemed capital proceeds will be $7.50.

The ATO has advised its intention to issue class ruling in relation to the buy-back by the end of June 2019.

Earlier this month, Woolworths reported sales growth across the board.

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