JB Hi-Fi has this morning announced an off-market share buy-back of up to 10% of its shares on issue (approximately $170 million worth of shares).
The buy-back will be largely funded through an expansion of JB Hi-Fi’s existing debt facility, however, it will not impact upon JB Hi-Fi’s ability to pursue growth opportunities. Further, JB Hi-Fi is expecting to maintain its 60% dividend payout ratio and anticipates dividends will continue to be fully franked.
Like the recent BHP buy-back, it will be conducted via an off-market tender process and participation will be voluntary.
Key dates and details of this buy-back are as follows:-
- Buy-Back record date to determine eligibility of shareholders to participate in the buyback is 7th April.
- Tender period opens at 9:00am Melbourne time on the 15th April 2011.
- Tender closing date is 13th May 2011 at 7:00pm.
- Shareholders will be able to tender their shares into the buyback at a discount of between 8% and 14% inclusive (at 1% intervals) or alternatively at the final tender price.
- The discount will be applied to the volume weighted average price of JB Hi-Fi’s shares over the five trading days up to and including the closing date of the tender period.
For Australian tax purposes, the buy-back price is expected to comprise of the following:-
- a capital component of $0.58 per share; and
- a fully franked dividend equal to the buy-back price less $0.58.
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