Commonwealth Bank of Australia Share Buy-Back
- Published: September 23, 2021
- Author: Asparq
For information purposes only – this may not be applicable for your circumstances.
Commonwealth Bank of Australia (CBA) is offering eligible holders of CBA shares the opportunity to participate in an off-market share buy-back. The buy-back follows continued strong operating performance and the completion of divestments which have resulted in capital in excess of CBA’s requirements. Closing on 1 October 2021, the buy-back is most attractive to low or no tax-paying investors such as superannuation funds, tax-exempt investors and individuals who pay no tax.
CBA recently announced plans to acquire up to $6 billion of ordinary shares from investors through an off-market share buy-back. Shareholder participation is voluntary.
- The minimum buy-back amount will be 100 units.
- The buy-back will include a fixed capital component of $21.66 and a fully franked dividend (the difference between the buy-back price and the fixed capital component).
- The combination of the price being paid by CBA and the fully franked dividend results in the value being greater than the current market price of CBA.
- A better after-tax return may be realised than what is likely to be available when selling directly on market.
- If the buy-back is popular, shareholders will be subject to scale-back of the shares bought by CBA compared to the amount they have put up for sale.
- CBA shares may be purchased after the buy-back, however, the share price may increase during the time you are out of the market, reducing the gain from the buy-back.
- There is no associated cost to participate in this offer.
How to participate
To participate in the buy-back, please get in touch with your Asparq Financial Adviser, visit commbank.com.au/buyback or complete a hard copy application by the 29 September 2021. To find out more please read the CBA Share Buy-Back booklet.
All investments are subject to risk, which means the value of your investment may rise or fall. Before making an investment decision, it is important to understand the risks that can affect the value of your investment. If you have any questions, please contact your Asparq Financial Adviser to find out more.
The information contained herein is of a general nature only and is not intended to be relied upon nor is it a substitute for appropriate professional advice. Whilst all care has been taken in the preparation of the material, it is not guaranteed to be accurate. Individual circumstances are different and as such require specific examination. Asparq cannot accept liability for any loss or damage of any kind arising out of the use of or reliance upon all or any part of this material. Additional information may be made available upon request.