Should i participate in bhp buyback

Free Membership. Join Eureka Report today. Thank you. Sign up. Email is required. Email must be a valid email. Password is required. First name is required. Last name is required. Mobile phone number is required. Mobile phone number is invalid. You must accept the terms and conditions.

What emails do members receive? Sign up for free. Didn't get the code? Re-send code. Remember me. Two-Factor Authentication. The code you entered is incorrect. Please try again. Please enter the code below. Verification code is required. Don't ask again on this device for 30 days. Request a new code. Search the FT Search. World Show more World. US Show more US. Companies Show more Companies. Markets Show more Markets. Opinion Show more Opinion.

Please speak to your accountant or tax professional and obtain your own advice first. The commentary below is a guide only. If you are paying less than the marginal rate of This is because the after-tax proceeds will be higher from the off market buy back compared to selling the shares on market. The following examples illustrate how your different tax rate can affect the ultimate sale price.

You can use the tax calculator on the BHP buy back website to enter your own personal tax circumstances. This is what makes off market buybacks so advantageous to some shareholders, and because shareholders are keen to accept, it means that the company can purchase the shares at a discount to the market price. Shareholders will be offered the opportunity to participate and tender all, some or none of their shares, with the tender closing at 5. As a scale-back is probable, BHP has also announced some priority rules — to clear successful shareholders who are left with a residual parcel of 65 shares or less, and a minimum allocation to successful tenderers of the first shares.

The market price will be determined by calculating the volume weighted average price of trades on the ASX over the 5 trading days immediately before the closing day, i.

The announcement of the buy-back price and any scale back will be made on Monday 17 December, with payment to successful tenders by Monday 24 December. The premise is that you should accept the buyback if your effective sale price after tax is higher than you could achieve by selling the same shares on the ASX. In pension, the outcome looks very attractive.

In accumulation, it is still going to make sense to accept in most situations, more so if you can utilise the capital loss.

BHP has conducted off-market share buybacks in the past and they have been heavily oversubscribed. This is larger and represents 7. It will, however, be very popular as the franked dividend component is very high. Paul Rickard , Switzer. Paul Rickard is co-founder of the Switzer Super Report.