Wrap Text
BHPs US$10.4 billion shareholder return program
BHP Billiton Plc
Registration number 3196209
Registered in England and Wales
Share code: BIL
ISIN: GB0000566504
NEWS RELEASE
Release Time IMMEDIATE
Date 1 November 2018
Release Number 22/18
BHP announces US$10.4 billion shareholder return program
BHP plans to return US$10.4 billion to its shareholders through the combination of
an off-market buy-back and a special dividend.
The program will commence immediately with BHP targeting an off-market buy-back
of US$5.2 billion (A$7.3 billion)(1) of BHP Billiton Limited shares (Off-Market Buy-
Back) under which BHP Billiton Limited can buy back shares at up to a 14%
discount. BHP intends to pay the balance of the net proceeds from the sale of its
Onshore US assets (expected to be US$5.2 billion) to all shareholders in the form of
a special dividend (Special Dividend) to be determined following completion of the
Off-Market Buy-Back, and to be payable in January 2019.
BHP Chief Executive Officer, Andrew Mackenzie, said "We made a commitment that
all the net proceeds from the disposal of our Onshore US assets would be returned
to shareholders and we are honouring that commitment now that the sale
transactions have been completed. Returning this US$10.4 billion will bring the total
cash returned to shareholders to US$21 billion over the last two years.”
BHP Chairman, Ken MacKenzie, said “Consistent with our Capital Allocation
Framework, the Board has carefully considered how best to return the net proceeds
to our shareholders. We believe that the off-market buy-back and special dividend
program announced today will return significant value to all our shareholders,
allowing the entire BHP global shareholder base to participate, both directly and
indirectly, in the shareholder return program.”
Shareholder return program
All shareholders are expected to benefit from the Off-Market Buy-Back as (i) for
some BHP Billiton Limited shareholders, depending on their tax status, the after-tax
return from participating in the Off-Market Buy-Back may be greater than the return
from the sale of their shares on-market; (ii) the Off-Market Buy-Back is expected to
improve return on equity, cash flow per share and earnings per share for all
shareholders who continue to hold shares in BHP; and (iii) the Off-Market Buy-Back
is an efficient means of returning capital to shareholders, including as a result of the
discount of up to 14 per cent available to BHP Billiton Limited under the Off-Market
Buy-Back.
BHP will target an Off-Market Buy-Back of US$5.2 billion (A$7.3 billion)(1) of BHP
Billiton Limited shares. BHP Billiton Limited may, at its discretion, vary the size of the
Off-Market Buy-Back, subject to certain legal restrictions. BHP Billiton Limited
expects to announce the results of the Off-Market Buy-Back on Monday 17
December 2018.
Following completion of the Off-Market Buy-Back, BHP intends to determine the
Special Dividend on Monday 17 December 2018, with the per share dividend amount
to be calculated by reference to the reduced number of shares on issue following
completion of the Off-Market Buy-Back. The Special Dividend will be fully franked
and, according to the indicative timetable included in this announcement, paid on
Wednesday 30 January 2019, with a dividend ex-entitlement date of Thursday 10
January 2019 on the Australian Securities Exchange, London Stock Exchange and
New York Stock Exchange, and Wednesday 9 January 2019 on the Johannesburg
Stock Exchange.
The dates for the Off-Market Buy-Back and the intended Special Dividend are set out
in the indicative timetable included in this announcement. While BHP does not
anticipate any changes to the times and dates set out in the indicative timetable, it
reserves the right to vary them without notification.
Details of the Off-Market Buy-Back
The Off-Market Buy-Back is considered an off-market buy-back for the purposes of
the Income Tax Assessment Act 1936 (Cth). BHP Billiton Limited will repurchase
BHP Billiton Limited shares under the Off-Market Buy-Back at a discount of up to 14
per cent to the volume weighted average price (VWAP) of BHP Billiton Limited
shares (Buy-Back Price), where the VWAP will be calculated for the five trading day
period up to and including the closing date of the Off-Market Buy-Back (Market
Price). Eligible shareholders of BHP Billiton Limited may tender some or all of their
shares at discounts of between 10 per cent and 14 per cent inclusive (at one per
cent intervals) to the Market Price or as a final price tender (which is an election to
receive the Buy-Back Price). Eligible shareholders may also impose a minimum price
condition on their tender, and if the Buy-Back Price is less than the minimum price
specified, then that shareholder’s tender will not be accepted. The Buy-Back Price
will be determined according to the tenders lodged by eligible shareholders and the
Market Price.
Eligible shareholders may choose to participate in the Off-Market Buy-Back for
various reasons and, in so doing, may take advantage of the tax benefits that arise
only under the Australian taxation regime. BHP Billiton Limited does not anticipate
that shareholders who are resident outside Australia will participate, as they are
likely to obtain a better outcome by selling their shares on-market. Certain excluded
foreign persons, including shareholders in the United States (US), US persons and
residents of Canada, will not be eligible to participate in the Off-Market Buy-Back. In
addition, American Depositary Receipts (ADRs) and restricted employee shares may
not be tendered into the Off-Market Buy-Back.
For shares successfully tendered into the Off-Market Buy-Back, the cut-off date for
franking credit entitlement under the 45 day rule, for the purposes of the Off-Market
Buy-Back, is Thursday 1 November 2018.
For Australian tax purposes, the Buy-Back Price received by participating
shareholders will comprise the following:
a) a capital component of A$0.38 per share; and
b) a fully franked deemed dividend equal to the Buy-Back Price less A$0.38
per share.
For the purpose of capital gains tax calculations, the capital proceeds will be the
A$0.38 per share capital component plus an amount equal to the excess of the Tax
Value(2) over the Buy-Back Price.
Under the Off-Market Buy-Back tender process, BHP Billiton Limited will buy all
shares tendered by eligible shareholders who elect to receive the Buy-Back Price or
who tender their shares at a discount greater than, or equal to, the final buy-back
discount determined under the tender process, subject to any required scale back.
To the extent that more shares are tendered than the amount of the buy-back, then
tenders will be scaled back, subject to the rules on small shareholdings (see below).
All tendered shares that are accepted by BHP Billiton Limited will be bought back at
the Buy-Back Price, even if they are tendered at a discount that represents a price
below the Buy-Back Price. BHP Billiton Limited will not buy back any shares
tendered by shareholders at a price above the Buy-Back Price or tenders with a
minimum price condition that is greater than the Buy-Back Price.
The scale back mechanism, consistent with market practice, has been structured to
minimise eligible registered shareholders with small holdings from being
disadvantaged. If there is a scale-back, eligible shareholders will have the first 165
shares (or if they hold fewer than 165 shares, then that smaller number of shares)
accepted into the Off-Market Buy-Back (Priority Allocation). In addition, any eligible
shareholders who tender all of their shares at or below the Buy-Back Price and who
would be left with a small holding (65 shares or fewer) after the Priority Allocation
and any scale back, will have their tender accepted in full.
It is likely that the BHP Billiton Limited shares could be sold on-market at a price that
will be higher than the Buy-Back Price, as shareholders are being invited to tender
shares into the Off-Market Buy-Back at discounts to the Market Price. However, for
some shareholders, depending on their individual circumstances, the Off-Market
Buy-Back may provide a greater after-tax return than the return from selling their
shares on-market. The Off-Market Buy-Back will have different tax consequences for
different shareholders. As such, BHP Billiton Limited strongly recommends that
shareholders seek their own professional advice (including financial and tax advice)
about the implications of participation in the Off-Market Buy-Back in respect of their
own individual circumstances.
Eligible shareholders will be sent a personalised Off-Market Buy-Back information
flyer detailing how eligible shareholders can obtain a copy of the Off-Market Buy-
Back booklet (Buy-Back Booklet). The Buy-Back Booklet contains the Off-Market
Buy-Back terms and conditions (including eligibility and details of the tender
process), and is expected to be available on our website (bhp.com), or (if requested)
dispatched in hardcopy, from Thursday 8 November 2018. Neither the information
flyer, nor the Buy-Back Booklet, can be distributed or released in or into the US or
Canada.
Shareholders should read all of the information in the Buy-Back Booklet before
deciding whether to participate in the Off-Market Buy-Back.
Special Dividend considerations
Having regard to the scale, nature and timing of the intended Special Dividend,
BHP’s Dividend Reinvestment Plan will not operate with respect to the Special
Dividend.
Shareholders will not be entitled to the Special Dividend in respect of shares that are
successfully sold into the Off-Market Buy-Back. This is because the Special Dividend
will be paid after completion of the Off-Market Buy-Back.
The record date for the Special Dividend will occur after the Off-Market Buy-Back
has been completed to ensure that the “Last-In-First-Out” (LIFO) rule does not apply
to deny franking credits in respect of the Special Dividend for shareholders who both
successfully sell shares into the Off-Market Buy-Back and receive the Special
Dividend on shares held on Friday 11 January 2019 (according to the indicative
timetable) (3).
Shareholder return timetable(4)
Event Date
Off-Market Buy-Back announcement 1 November 2018
Last day that shares can be acquired to be eligible for franking credit 1 November 2018
entitlements under the Off-Market Buy-Back(5)
Last day that shares can be acquired to be eligible to participate in the Off- 5 November 2018
Market Buy-Back(6)
Shares quoted ex-entitlement to participate in the Off-Market Buy-Back on 6 November 2018
the Australian Securities Exchange (ASX) (shares acquired on the ASX on
or after this date will not confer an entitlement to participate in the Off-
Market Buy-Back)
Determination of eligible BHP Billiton Limited shareholders entitled to 7 November 2018
participate in the Off-Market Buy-Back (Buy-Back Record Date)
Expected completion of mail out of Off-Market Buy-Back information flyer 15 November 2018
to eligible shareholders
Off-Market Buy-Back tender period opens 19 November 2018
Off-Market Buy-Back tender period closes – tenders must be received by 14 December 2018
5.00pm (AEDT) (Closing Date)
Announcement of the Buy-Back Price and any scale back 17 December 2018
Special Dividend determined and announced 17 December 2018
Completion of Off-Market Buy-Back proceeds dispatch/crediting to 24 December 2018
successful BHP Billiton Limited shareholders
Special Dividend currency conversion into South African Rand 4 January 2019
Last day to trade cum-dividend on Johannesburg Stock Exchange 8 January 2019
Special Dividend ex-dividend date (Johannesburg Stock Exchange) 9 January 2019
Last day to trade cum-dividend on ASX, London Stock Exchange and New 9 January 2019
York Stock Exchange(5)
Special Dividend ex-dividend date (ASX, London Stock Exchange and New 10 January 2019
York Stock Exchange)(7)
Special Dividend record date (including currency conversion and currency 11 January 2019
election dates for ASX and London Stock Exchange)
Special Dividend payment date 30 January 2019
BHP Billiton Plc shareholders registered on the South African section of the register
will not be able to dematerialise or rematerialise their shareholdings between the
dates of Wednesday 9 January and Friday 11 January 2019 (inclusive), and
transfers between the UK register and the South African register will not be permitted
between the dates of Friday 4 January and Friday 11 January 2019 (inclusive).
Shareholder enquiries
Shareholders who have any enquiries in relation to the Off-Market Buy-Back may
contact the dedicated Off-Market Buy-Back enquiry line on 1300 366 363 within
Australia or +61 3 9415 4020 when calling from outside Australia, or visit our
website: bhp.com.
Important notice:
This announcement does not constitute, or form part of, any offer or invitation to sell,
or any solicitation of any offer to purchase, any securities in any jurisdiction, nor shall
it or the fact of its distribution be relied on in connection with any contract thereof. No
indications of interest in the Off-Market Buy-Back are sought by this announcement,
which relates to the BHP shareholder return program. Shareholders who are (or
nominees who hold BHP Billiton Limited shares on behalf of or for the account or
benefit of persons who are) in the United States or US persons (within the meaning of
Regulation S under the United States Securities Act of 1933, as amended), residents
of Canada or who are otherwise excluded foreign persons will not be eligible to
participate in the Off-Market Buy-Back described in this announcement. ADRs and
restricted employee shares may not be tendered into the Off-Market Buy-Back. Off-
Market Buy-Back documents, including the information flyer referred to in this
announcement, the booklet describing the terms of the Off-Market Buy-Back and
tender forms, when issued, will not be distributed or released in or into the United
States or Canada.
(1) At transacted rate.
(2) The Tax Value will be calculated pursuant to ATO guidelines (detailed in Tax Determination 2004/22). The Tax Value will be the five
day VWAP of BHP Billiton Limited shares on the ASX and Chi-X up to and including Wednesday 31 October 2018, adjusted for the
movement in the BHP Billiton Plc share price from the closing price on the London Stock Exchange on Wednesday 31 October 2018
to the opening price on the London Stock Exchange on the closing date of the Off-Market Buy-Back (Tuesday 18 December 2018).
(3) The ATO advises that the Commissioner considers that the LIFO rule is not offended by the timetable proposed. Payment of the
Special Dividend prior to completion of the Off-Market Buy-Back could have resulted in the LIFO rule applying in certain
circumstances (for the purposes of the 45 day rule) to deny franking credits to some shareholders on the Special Dividend – refer
ATO guidance which can be accessed at https://www.ato.gov.au/Business/Imputation/In-detail/Applying-the-last-in-first-out-
method-under-the-holding-period-rule/.
(4) While BHP does not anticipate any changes to these times and dates, it reserves the right to vary them without notification.
(5) Shares acquired after this date will generally not satisfy the 45-day rule for the purposes of determining an Australian shareholder’s
franking credit entitlement on the Off-Market Buy-Back.
(6) The acquisition of shares on Friday 2 November or Monday 5 November 2018 will prevent a shareholder from satisfying the 45-day
rule on certain shares acquired on or before Thursday 1 November 2018 which are tendered into the Buy-Back.
(7) BHP Billiton Limited and BHP Billiton Plc shares are quoted in the form of American Depositary Shares (ADSs) and traded as ADRs on
the New York Stock Exchange. Each ADS represents two ordinary shares.
Sponsor: UBS South Africa (Pty) Limited
Further information on BHP can be accessed on our website: bhp.com.
Media Relations Investor Relations
Email: media.relations@bhpbilliton.com Email: investor.relations@bhpbilliton.com
Australia and Asia Australia and Asia
Gabrielle Notley Tara Dines
Tel: +61 3 9609 3830 Mobile: +61 4 1107 1715 Tel: +61 3 9609 2222 Mobile: + 61 499 249 005
United Kingdom and South Africa United Kingdom and South Africa
Neil Burrows Elisa Morniroli
Tel: +44 20 7802 7484 Mobile: +44 7786 661 683 Tel: +44 20 7802 7611 Mobile: +44 7825 926 646
North America Americas
Judy Dane James Wear
Tel: +1 713 961 8283 Mobile: +1 713 299 5342 Tel: +1 713 993 3737 Mobile: +1 347 882 3011
BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209
LEI WZE1WSENV6JSZFK0JC28 LEI 549300C116EOWV835768
Registered in Australia Registered in England and Wales
Registered Office: Level 18, 171 Collins Street Registered Office: Nova South, 160 Victoria Street
Melbourne Victoria 3000 Australia London SW1E 5LB United Kingdom
Tel +61 1300 55 4757 Fax +61 3 9609 3015 Tel +44 20 7802 4000 Fax +44 20 7802 4111
Members of the BHP Group which is
headquartered in Australia
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