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BIL
BIBLT
BIL - BHP Billiton Plc - BHP Billiton announces an off-market buy-back of
BHP Billiton Limited shares
BHP Billiton Plc
Share code: BIL
ISIN: GB0000566504
BHP BILLITON ANNOUNCES AN OFF-MARKET BUY-BACK OF BHP BILLITON LIMITED SHARES
BHP Billiton today announced an off-market tender buy-back (Off-Market Buy-
Back) of BHP Billiton Limited shares that will form an important part of its
expanded US$10 billion capital management program. The on-market buy-back of
BHP Billiton Plc shares that was reactivated in November 2010 will continue,
including over the period of the Off-Market Buy-Back process. Subject to
market conditions, it is BHP Billiton`s expectation that the US$10 billion
capital management initiative will be largely completed by the end of the
2011 calendar year.
The Off-Market Buy-Back of BHP Billiton Limited shares with a target size of
A$5 billion will commence immediately in accordance with the timetable set
out below. BHP Billiton Limited may, at its discretion, vary the size of
the Off-Market Buy-Back.
The announcement continues BHP Billiton`s strong track record of returning
excess capital to shareholders. On completion of the US$10 billion capital
management initiative, BHP Billiton will have repurchased a cumulative US$23
billion of BHP Billiton Limited and BHP Billiton Plc shares since 2004,
representing 15 per cent of then issued capital().
BHP Billiton Group Executive and Chief Financial Officer, Alex Vanselow,
said "The decision to expand our capital management initiative, including
the activation of an off-market buy-back of BHP Billiton Limited shares, is
entirely consistent with our commitment to maintain an appropriate capital
structure while we continue to make substantial investments in our growth
projects. The company`s particularly strong balance sheet affords BHP
Billiton substantial flexibility as it continues with significant investment
in organic growth that is expected to exceed US$80 billion over the five
years to the end of the 2015 financial year."
Undertaking both an off-market and on-market buy-back, coupled with an
increased interim dividend allows the entire BHP Billiton global shareholder
base to participate, both directly and indirectly, in the capital management
initiative. An off-market buy-back provides an efficient means of
generating economic value for all BHP Billiton shareholders. While the
precise impact of the Off-Market Buy-Back cannot be determined, it is
expected to have a lasting and positive impact on BHP Billiton`s earnings
per share, cash flow per share and return on equity. As a result, all BHP
Billiton shareholders, including those not participating in the Off-Market
Buy-Back process, regardless of location and tax status, are expected to
benefit from the Off-Market Buy-Back. The Off-Market Buy-Back will enable
the purchase of BHP Billiton Limited shares at a material discount to the
prevailing market price of BHP Billiton Limited and can be completed in a
shorter period of time than on-market buy-backs of a comparable size.
The target Off-Market Buy-Back size of A$5 billion will enable BHP Billiton
to continue to pay fully franked dividends under its progressive dividend
policy. The Off-Market Buy-Back is expected to be funded from BHP
Billiton`s cash resources.
Details of the Off-Market Buy-Back
BHP Billiton Limited will repurchase shares under the Off-Market Buy-Back at
a discount of at least 10 per cent to the volume weighted average price of
BHP Billiton Limited shares over the five trading days 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 1 per cent
intervals) to the Market Price or as a final price tender (which is simply
an election to receive the final buy-back price). The final 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 account of the tax benefits
that only arise under the Australian taxation regime. BHP Billiton 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. Excluded foreign persons, including shareholders in the
US, US persons and residents of Canada will not be eligible to participate
in the Off-Market Buy-Back. ADRs and restricted employee shares may not be
tendered into the Off-Market Buy-Back.
For Australian tax purposes, the final buy-back price received by
participating shareholders will comprise the following:
a) a capital component of A$0.28 per share; and
b) a fully franked deemed dividend equal to the final buy-back price less
A$0.28 per share.
For the purpose of capital gains tax calculations, the capital proceeds will
be the A$0.28 capital component plus an amount equal to the excess of the
Tax Value() over the final 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 final
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. The operation of the scale back has been
structured to ensure that eligible registered shareholders with small
holdings are not disadvantaged. All shares that are accepted by BHP Billiton
Limited will be bought back at the final buy-back price, even if they are
tendered at a discount that represents a price below the final buy-back
price.
BHP Billiton Limited will not buy back any shares tendered by shareholders
at a price above the final buy-back price.
Although the target size of the Off-Market Buy-Back is A$5 billion, BHP
Billiton Limited may, at its discretion, vary the size of the Off-Market Buy-
Back. BHP Billiton Limited also retains the discretion to repurchase a
lesser amount of shares than indicated or no shares at all.
Eligible shareholders will be sent the Off-Market Buy-Back booklet
containing the terms and conditions of the Off-Market Buy-Back by 16 March
2011. The booklet cannot be sent into the United States or Canada.
Off-Market Buy-Back Timetable()
The indicative timetable for the Off-Market Buy-Back is outlined below.
Event Date
Off-Market Buy-Back announcement 22 February 2011
Cut-off date for franking credit entitlement under 24 February 2011
45-day rule()
Shares quoted ex-entitlement to participate in the 25 February 2011
Off-Market Buy-Back on the ASX (shares acquired on
the ASX on or after this date will not typically
confer an entitlement to participate in the Off-
Market Buy-Back)
Determination of eligible shareholders entitled to 3 March 2011
participate in the Off-Market Buy-Back (record
date)
Completion of mail out of Off-Market Buy-Back 16 March 2011
documents to eligible shareholders
Off-Market Buy-Back tender period opens 21 March 2011
Off-Market Buy-Back tender period closes - tenders 8 April 2011
must be received by 7.00pm (AEST)
Announcement of the final buy-back price and any 11 April 2011
scale back
Off-Market Buy-Back proceeds dispatched/credited No later than 18
to participating shareholders completed April 2011
Shareholder Enquires
Shareholders who have any enquiries in relation to the Off-Market Buy-Back
may contact BHP Billiton`s buy-back enquiry line on 1300 612 584 within
Australia, 0800 451 521 within New Zealand or +61 3 9415 4868 if you are
calling from outside Australia or New Zealand, or visit our website
(www.bhpbilliton.com).
Shareholders should seek their own professional advice (including tax
advice) about the implications of participating in the Off-Market Buy-Back
in their own individual circumstances.
Important notice:
Not for distribution or release in or into the United States or Canada.
This press release 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 press release, which
relates to the BHP Billiton capital management program. Shareholders who are
(or nominees who hold BHP Billiton Limited shares on behalf of or for the
account 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)
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
press release. ADRs and restricted employee shares may not be tendered into
the Off-Market Buy-Back. Off-Market Buy-Back documents, including the
booklet describing the terms of the Off-Market Buy-Back and tender forms,
when issued, will not be distributed or sent into the United States or
Canada.
() For illustrative purposes only. In this instance, we have assumed a A$5
billion off-market buy-back of BHP Billiton Limited shares (at a discount of
14 per cent) with the remainder of the capital management program completed
through on-market buy-backs of BHP Billiton Plc shares. Based upon volume
weighted average price during January 2011 of A$45.05 per BHP Billiton
Limited share and GBP24.64 per BHP Billiton plc share, and issued capital
for each as at 30 June 2004. Actual buy-back prices for the US$10 billion
capital management initiative may be different.
() For illustrative purposes only. In this instance, we have assumed a A$5
billion off-market buy-back of BHP Billiton Limited shares (at a discount of
14 per cent) with the remainder of the capital management program completed
through on-market buy-backs of BHP Billiton Plc shares. Based upon volume
weighted average price during January 2011 of A$45.05 per BHP Billiton
Limited share and GBP24.64 per BHP Billiton plc share, and issued capital
for each as at 30 June 2004. Actual buy-back prices for the US$10 billion
capital management initiative may be different.
() Tax Value will be calculated pursuant to the Australian Tax Office
guidelines (detailed in Tax Determination 2004/22). The Tax Value will be
the five day VWAP of BHP Billiton Limited shares on the ASX up to and
including 21 February 2011, adjusted for the movement in the BHP Billiton
Plc share price from the closing price on the London Stock Exchange on 21
February 2011 to the opening price on the London Stock Exchange on the
closing date of the Off-Market Buy-Back (8 April 2011).
() While BHP Billiton Limited does not anticipate any changes to these
times and dates, it reserves the right to vary them without notification.
() Shares acquired after this date will generally not satisfy the 45-day
rule for the purposes of calculating an Australian shareholder`s franking
credit entitlement.
Further information on BHP Billiton can be found on our Internet site:
www.bhpbilliton.com
Australia United Kingdom & South Africa
Brendan Harris, Investor Andre Liebenberg, Investor Relations
Relations Tel: +44 20 7802 4131
Tel: +61 3 9609 4323 Mobile: Mobile: +44 7920 236 974
+61 437 134 814 email: Andre.Liebenberg@bhpbilliton.com
email:
Brendan.Harris@bhpbilliton.co United Kingdom & Americas
m Ruban Yogarajah, Media Relations
Tel: US +1 713 966 2907 or
Amanda Buckley, Media RelationsUK +44 20 7802 4033
Tel: +61 3 9609 2209 Mobile: UK +44 7827 082 022
Mobile: +61 419 801 349 email: Ruban.Yogarajah@bhpbilliton.com
email: Amanda.Buckley@bhpbilliton.com
Americas
Kelly Quirke, Media Relations Scott Espenshade, Investor Relations
Tel: +61 3 9609 2896 Tel: +1 713 599 6431 Mobile: +1 713 208 8565
Mobile: +61 429 966 312 email: Scott.Espenshade@bhpbilliton.com
email: Kelly.Quirke@bhpbilliton.com
Fiona Martin, Media Relations
Tel: +61 3 9609 2211 Mobile: +61 427 777 908
email: Fiona.Martin2@bhpbilliton.com
BHP Billiton Limited ABN 49 BHP Billiton Plc Registration number
004 028 077 3196209
Registered in Australia Registered in England and Wales
Registered Office: 180 Registered Office: Neathouse Place
Lonsdale Street London SW1V 1BH United Kingdom
Melbourne Victoria 3000 Tel +44 20 7802 4000
Australia Fax +44 20 7802 4111
Tel +61 1300 55 4757
Fax +61 3 9609 3015
Members of the BHP Billiton group which is headquartered in Australia
Date: 22/02/2011 07:55:01 Produced by the JSE SENS Department.
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