Ashurst advises Woolworths on its A$2 billion off-market share buy-back

Ashurst has advised Woolworths Group Limited (Woolworths Group) working closely with its treasury and in house tax and legal teams on its A$2 billion off-market share buy-back (Buy-Back), following the recently completed demerger of Endeavour Group and repayment of associated intercompany loans.

The current strength of the Woolworths Group balance sheet and the underlying strength of the business will allow Woolworths Group to undertake the buy-back to return A$2 billion surplus capital to shareholders whilst preserving an appropriate capacity for continued investment in the business and without prejudicing Woolworths Group’s ability to maintain its full year ordinary dividend payout ratio.

The Buy-Back will be conducted by way of an off-market tender process pursuant to which eligible shareholders are invited to offer to sell their shares to Woolworths Group at a discount between 10% to 14% at 1% intervals to the Market Price or at the Buy-Back Price which is an election to sell shares at the price determined by Woolworths Group following completion of the tender process. The Buy-Back Price will be determined as the lowest price at which Woolworths Group can buy-back the targeted amount of capital.

The offer period during which shareholders can make an offer is from 13 September 2021 to 15 October 2021. The Buy-Back Price and any scale back will be announced and buy-back contracts entered into on 18 October 2021. The buy-back proceeds will be paid on 21 October 2021.

The Ashurst team was co-led by Corporate Transaction partner Sarah Dulhunty and Tax partner Vivian Chang.

They were assisted by partners Andrew Kim and Phil Breden, senior associate Miao Qun Unsworth-Tang, lawyer Eugene Bang and graduate Johnny Nguyen (Corporate Transactions); partner Stuart Rubin and counsel Ethan Perry (on US securities law issues ), partner Tim Brookes (Digital Economy), senior associate Eli Bursky, lawyers Philippa Lo and Thomas McKenzie (Tax).

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