Metcash Limited (ASX:MTS) released an information Booklet related to Off-Market Buy-Back that was announced by Metcash on 25 June 2018. The Booklet contained few dates like ex-dividend date (10 July 2018), record date (11 July 2018) and a final dividend payment (8 August 2018). The Group was seeking to buy back around $125 million (equivalent to 5.32% of issued capital) worth of its Shares through an off-market tender and buy-back size may vary depending on a number of factors including shareholder demand, market conditions and future capital requirements.
With this Buy-Back, the Group will be able to complete its capital management review which determined that Metcash’s strong balance sheet and cashflows provide it with sufficient capacity to return funds to shareholders, while also continuing to fund the company’s future growth plans. If one is interested in this Buy-Back, then one can sell the shares at specified discounts of between 8 per cent and 14 per cent (inclusive) to the Market Price. Moreover, the Group obtained a draft Class Ruling from the Australian Taxation Office and confirmed that for Australian tax purposes, the Buy-Back Price will comprise a Capital Component of $0.61 and the remainder of the price will be deemed to be a fully franked dividend and this Class Ruling cannot be given by the ATO until after the Buy-Back has closed. There is also some pressure mounting up with regards to signing up of the Food and Grocery Code of Conduct that has not been done by Metcash while Woolworths and Coles have already signed it.
The stock was marginally up by 0.38 per cent and was trading at $2.67 over its 52 week lower price, as on 4 July 2018; 02:56 PM AEST.
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