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BIL
BIBLT
BIL - BHP Billiton - Increased Capital Management Programme Including An Off-
Market Buy-Back Of BHP Billiton Limited Shares
BHP Billiton Plc
Share Code: BIL
ISIN: GB0000566504
BHP BILLITON ANNOUNCES INCREASED CAPITAL MANAGEMENT PROGRAMME INCLUDING AN OFF-
MARKET BUY-BACK OF BHP BILLITON LIMITED SHARES
BHP Billiton today announced a US$10 billion increase to the US$3 billion
capital management programme that was announced in August 2006. This amount
will be returned to shareholders over the next 18 months through a series
of buy-backs. The next stage in the capital management programme will be
the implementation of an off-market buy-back with a targeted maximum of
A$3.25 billion (US$2.5 billion) of BHP Billiton Limited shares. At the same
time, BHP Billiton will continue to repurchase shares on-market in BHP
Billiton Plc on an opportunistic basis. This programme continues BHP
Billiton`s outstanding track record of meeting its capital management
commitment and delivering value to shareholders. This increase of the
capital management program is in addition to the increased interim dividend
also announced today.
BHP Billiton`s Chairman, Don Argus, said "the increase in the Company`s
capital management programme reflects the Board`s continued commitment to
generating long-term, sustainable shareholder value. The Board of BHP
Billiton continues its absolute commitment to capital discipline. Our
confidence in the Company`s outlook and strong cash generative capability
has underpinned our decision to continue to announce sizeable returns to
our shareholders.
"In August 2006 we announced a capital management initiative of US$3 billion
to be returned to shareholders over an 18 month period. In the six months
since then, we have returned US$1.7 billion through a series of on-market
buy-backs of the BHP Billiton Plc stock at an average price per share of
US$18.23. Today we have increased the programme by a further US$10 billion.
We will start this with an off-market buy-back of BHP Billiton Limited
shares at a discount of no less than 10 per cent. This is our third
sizeable capital return announcement within a 12 month period and in
aggregate amounts to US$15 billion.
"Our financial strength means we are well positioned to fund our US$17.5
billion pipeline of projects and capture other value enhancing
opportunities as they arise. At the same time, we are able to maintain a
robust capital structure and continue with our progressive dividend policy,
as well as undertake this additional $10 billion return to shareholders,"
Mr Argus said.
BHP Billiton`s Chief Executive Officer, Chip Goodyear, said "At the conclusion
of today`s initiative we will have repurchased approximately 16.9 per cent
of the shares on issue since November 2004. We will have also returned
US$26.6 billion to shareholders through capital initiatives and dividends
since June 2001. This has occurred during a period when we have pursued
significant organic growth and acquisition opportunities as well as
establishing a strong track record in executing against our announced
initiatives promptly and effectively," he said.
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 this
initiative. The off-market buy-back provides an optimal means for
maximising economic value for all shareholders. The resulting increase in
the Company`s Earnings Per Share means all BHP Billiton Limited and BHP
Billiton Plc shareholders, including those not participating in the buy-
back process and regardless of location and tax status, benefit from an off-
market buy-back. In addition, because shares are purchased at a minimum
discount of 10% to the market price, a greater number of shares can be
bought back for the same total cost, compared with buying back at market
price. The value of the remaining shares will therefore be enhanced through
the increased earnings, cash flow and return on equity attributable to each
share.
The capital management programme will be funded from cash and borrowings.
Given the strength of BHP Billiton`s financial position, it will remain
strongly capitalised after completion of the programme in line with the
Company`s solid A credit rating and will not compromise its ability to fund
the strong pipeline of organic growth projects.
The Board of BHP Billiton has concluded that the proposed off-market buy-back
can be completed without negatively affecting the ability of BHP Billiton
Limited to pay fully franked dividends for the foreseeable future.
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% 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 buy-back ("Market Price"). Eligible shareholders of BHP
Billiton Limited may tender some or all of their shares at discounts of
between 10% and 14% inclusive (at 1% 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 buy-back. ADRs and restricted employee shares may not be tendered
into the buy-back.
For Australian tax purposes, the buy-back price received by participating
shareholders will comprise the following:
a) a capital component of A$2.50 per share; and
b) a fully franked deemed dividend equal to the buy-back price less A$2.50.
For the purpose of Capital Gains Tax calculations, the capital proceeds will
be the A$2.50 capital component plus an amount equal to the excess of the
Tax Value(1) over the buy-back price.
Under the off-market 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 maximum target buy-
back size is A$3.25 billion (approximately US$2.5 billion), the Company may
vary the size of the buy-back depending on tenders lodged by shareholders
and market conditions. In particular the Company may buy back significantly
less than the target maximum amount if the relative value of repurchasing
BHP Billiton Limited shares rather than BHP Billiton Plc shares materially
reduces by the end of the tender period. The final size of the off-market
buy-back will not be materially more than A$3.25 billion which will enable
BHP Billiton to continue to pay fully franked dividends under its
progressive dividend policy.
Eligible shareholders will be sent the buy-back booklet containing the terms
and conditions of the off-market buy-back by 28 February 2007. The booklet
cannot be sent into the United States or Canada.
Off-Market Buy-Back Timetable(2)
The indicative timetable for the off-market buy-back is outlined below.
Event Date
Buy-back announcement 7 February 2007
Cut-off date for franking entitlement 8 February 2007
under 45-day rule(3)
Shares quoted ex-entitlement to 12 February 2007
participate in the 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 buy-
back)
Determination of eligible shareholders 16 February 2007
entitled to participate in the buy-back
(record date)
Completion of mail out of buy-back 28 February 2007
documents to eligible shareholders
Buy-back tender period opens 5 March 2007
Buy-back tender period closes - tenders 23 March 2007
must be received by 7.00pm (AEST)
Announcement of the buy-back price and 26 March 2007
any scale back
Buy-back proceeds dispatched/credited No later than 2 April 2007
to participating shareholders completed
1. Tax Value will be calculated pursuant to the ATO guidelines (detailed
in Tax Determination 2004/22) which effectively provide that the Tax
Value will be the five day VWAP of BHP Billiton Limited shares on the
ASX up to and including 6 February 2007 and will be adjusted for the
movement in the BHP Billiton Plc share price from the closing price on
the London Stock Exchange on 6 February 2007 to the opening price on
the London Stock Exchange on the closing date of the buy-back (23
March 2007)
2. While BHP Billiton does not anticipate any changes to these times and
dates, it reserves the right to vary them without notification.
3. Shares acquired after this date will generally not satisfy the 45-day
rule for the purposes of calculating an Australian taxpayer`s tax
credits.
Shareholders who have any enquiries in relation to the off-market buy-back may
contact BHP Billiton`s buy-back enquiry line on 1300 558 547 toll free
within Australia or +61 3 9415 4633 if calling from outside Australia, or
visit our website www.bhpbilliton.com. Shareholders should seek their own
professional advice (including tax advice) about the implications of
participating in the buy-back in their own individual circumstances.
Further information on BHP Billiton can be found on our Internet site:
www.bhpbilliton.com
Australia
Samantha Evans, Media Relations
Tel: +61 3 9609 2898 Mobile: +61 400 693 915
email: Samantha.Evans@bhpbilliton.com
Jane Belcher, Investor Relations
Tel: +61 3 9609 3952 Mobile: +61 417 031 653
email: Jane.H.Belcher@bhpbilliton.com
United Kingdom
Mark Lidiard, Investor & Media Relations
Tel: +44 20 7802 4156 Mobile: +44 7769 934 942
email: Mark.Lidiard@bhpbilliton.com
Illtud Harri, Media Relations
Tel: +44 20 7802 4195 Mobile: +44 7920 237 246
email: Illtud.Harri@bhpbilliton.com
United States
Tracey Whitehead, Investor & Media Relations
Tel: US +1 713 599 6100 or UK +44 20 7802 4031
Mobile: +44 7917 648 093
email: Tracey.Whitehead@bhpbilliton.com
South Africa
Ivan Arriagada, Investor Relations
Tel: SA +27 11 376 2121 or UK +44 20 7802 4183
Mobile: +44 7769 936 227
email: Ivan.D.Arriagada@bhpbilliton.com
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 buy-back are sought by this press release,
which relates to the BHP Billiton capital management programme.
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 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 buy-back. Buy-back documents, including the
booklet describing the terms of the buy-back and tender forms, when issued,
will not to be distributed or sent into the United States or Canada.
BHP Billiton Limited BHP Billiton Plc
ABN 49 004 028 077 Registration number 3196209
Registered in Australia Registered in England and Wales
Registered Office: Registered Office:
180 Lonsdale Street Melbourne Neathouse Place London SW1V 1BH
Victoria 3000 Australia United Kingdom
Tel +61 1300 55 4757 Tel +44 20 7802 4000
Fax +61 3 9609 3015 Fax +44 207802 4111
A member of the BHP Billiton group which is headquartered in Australia
Date: 07/02/2007 08:05:03 Produced by the JSE SENS Department. |
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