BHP follows Rio, Fortescue with major share buyback

Image: BHP

BHP has completed a $US5.2 billion ($7.3 billion) buyback of company shares for distribution to shareholders.

The buyback was announced in light of BHP’s high-profile sale of its onshore US gas assets in Arkansas and Texas for $US10.8 billion, which was finalised in October.

BHP now joins an exclusive list of mining companies that announced major buybacks in 2018.

Rio Tinto announced in September that it was returning $US3.2 billion to shareholders through an off-market share buyback of up to 41.2 million shares in addition to a further on-market Rio share purchases down the track.

Fortescue Metals Group then followed this in October with its own announcement of a $500 million buyback to remain in place for 12 months due to strong performance in the financial year.

BHP’s buyback represents around 265.8 million BHP Group shares, or around 8.3 per cent of BHP Group’s issued share capital. BHP has set the share price for the buyback at $27.64 per share, a 14 per cent discount on the company’s five-day weighted volume average price (VWAP) of $32.14 a share.

In addition to the buyback, the board will pay a special dividend of $US1.02 per share in relation to further residuals from the sale of its onshore US assets.

“Completion of this program will bring total cash returned to shareholders to US$21 billion over the last two years,” said BHP chief financial officer Peter Beaven.