E-Malt.com News article: Australia: Foster's completes $400 mil share buy-back

Foster's Group Limited (Foster's) successfully completed its off-market share buy-back program, returning $400 million to shareholders, according to company’s press release, April 10.

The outcomes of the off-market share buy-back tender are summarised below:

Market price1: $6.8650

Buy-back discount: 14%

Buy-back price: $5.90

Capital component: $1.81 per share

Fully franked dividend component: $4.09 per share

Tax value: $7.01 per share

Number of shares bought back: 67.8 million

Value of shares bought back: $400 million

Percentage of issued capital bought back: 3.3%


Under the buy-back tender, announced in February this year, Foster's has bought back $400 million worth of shares at $5.90 per share, a 14% discount to the market price1 of $6.8650.

A total of 67.8 million shares, or 3.3% of Foster's issued capital, was bought back at $5.90 per share. No tenders were excluded on the basis of minimum price condition.

"This is an excellent result for Foster's shareholders and delivers on our commitment to return approximately $400 million of surplus capital to shareholders," Foster's Chief Executive Officer, Trevor O'Hoy said.

For shareholders who successfully tendered their shares, $4.09 of the buy-back price is a fully franked dividend for Australian taxation purposes.

For Australian capital gains tax purposes, the deemed capital proceeds are $2.92, comprised of the $1.81 capital component plus $1.11, the excess of the Tax Value over the buy-back price.


Due to strong tender demand, a scale back of tenders has been undertaken. Shares tendered at a 14% tender discount and Final Price Tenders will be accepted but will be scaled back by approximately 42% subject to the following:

Priority Allocations - a Priority Allocation of 720 shares will be bought back from each shareholder who tendered shares at a 14% discount or as a Final Price Tender. Where the total number of shares within the Priority Allocation tendered is equal to or less than 720, all shares will be bought back.

Small Holding Tenders - a Small Holding Tender is one which was tendered at a 14% discount or as a Final Price Tender and would result in a holding of 290 shares or less as a result of the scale-back. Small Holding Tenders will not be subject to scale-back.

Shares tendered at less than a 14% discount were not bought back and are now available for shareholders to deal with at their discretion.

Dispatch of cheques and direct crediting to bank accounts of tender proceeds will be complete by 17 April 2007.

1. Volume weighted average price of Foster's ordinary shares on the ASX over the five trading days up to and including 5 April 2007.
2. The Tax Value of $7.01 was calculated as $6.92 adjusted by the movement in the S&P/ASX200 Index from the open of trading on 20 February 2007 to the close of trading on 5 April 2007.


11 April, 2007