Santos successfully completes $300 million off-market buy-back

Santos has announced the successful completion of its off-market share buy-back of $300 million.

The outcomes of the buy-back are as follows:

Size $300 million                
Market Price $18.8724
Buy-back discount  14%
Buy-back price $16.23
Capital component  $2.98
Fully franked dividend component  $13.25
Tax Value  $16.42
Shares bought back 18.5 million
Percentage of issued ordinary capital 3.1%
Scale back   59.16%


The 14 per cent buy-back discount enabled Santos to return surplus capital in an efficient manner and is expected to have a positive impact on earnings per share.

Santos’ Chief Financial Officer, Peter Wasow, said “We are delighted with the strong support shareholders have shown for the buy-back, which has allowed us to repurchase 3.1 per cent of our issued capital at the maximum discount of 14 per cent. The successful completion of the buy-back demonstrates our commitment to efficient capital management and our confidence in the strength of the Company’s financial position.”

Due to the strong demand for the buy-back, a 59.16 per cent scale back of tenders is required. Shareholders who tendered their shares at a 14 per cent discount and/or as final price tenders will have a priority allocation of 300 shares bought back before the scale back is applied. As a result of the 59.16 per cent scale back, successful shareholders will have 40.84 per cent of their shares tendered in excess of the priority allocation bought back. No tenders were excluded on the basis of a minimum price condition.

To ensure that registered shareholders with small holdings are not disadvantaged, the scale back has been structured so that successful shareholders who tendered all of their shares at a 14 per cent tender discount and/or as a final price tender and who would be left with 130 shares or less as a result of the priority allocation and scale back, will have all of their shares bought back in full.    

For shareholders who have successfully tendered their shares, $13.25 of the buy-back price is treated for Australian tax purposes as a fully franked dividend. For Australian capital gains tax purposes, the deemed capital proceeds are $3.17, being the $2.98 capital component plus $0.19, being the excess of the Tax Value over the buy-back price.

The Tax Value of $16.42 was calculated as $17.14, adjusted for the movement in the Oil & Gas Exploration & Production subset of the S&P/ASX 200 Index from the announcement of the buy-back on 21 August 2008 to the close of the buy-back on 3 October 2008.

Payment for shares bought back will be credited to nominated bank accounts and cheques will be posted to shareholders by 10 October 2008.  Shares that have been tendered into the buy-back but not bought back are expected to be released to shareholders by Tuesday, 7 October 2008.

Key dates for the Buy-Back1

EventDate (2008)
Cut-off date for Buy-Back franking entitlements under the 45-day rule2 21 August
Shares quoted ex-entitlement to participate in the Buy-Back on the ASX. Shares acquired on the ASX on or after this date will generally not confer an entitlement to participate in the Buy-Back 27 August
Determination of eligible shareholders entitled to participate in the Buy-Back (Buy-Back Record Date) 2 September
Distribution of Buy-Back documents to shareholders completed 12 September
Tender period opens (online tender facility available below) 15 September
Tender period closes at 7.00pm (Eastern Standard Time) 3 October
Determination of the Buy-Back price and scale back (if any) with details posted on Santos’ website at 6 October
Entry into Buy-Back Contracts and details of Buy-Back Price and scale back (if any) made available via announcement to the ASX 6 October
Dispatch/crediting of Buy-Back proceeds to participating shareholders completed 10 October


1. While Santos does not anticipate any changes to these dates and times, it reserves the right to vary them without notification. Any change in date or time will take effect from the time it is authorised by the Board and will be publicly announced as soon as practicable following the Board’s authorisation. Santos may also decide not to proceed with the Buy-Back and may vary the size of the Buy-Back.

2. Shares acquired after this date will generally not qualify for franking entitlements in the Buy-Back under the 45-day holding period rule.

Details of the Buy-Back are contained in the Buy-Back booklet that has been sent to eligible shareholders and is available below to download. Some of the capitalised words used throughout this website have defined meanings which are detailed in Section 6 ‘Definitions and interpretation’ of the Buy-Back booklet. To ensure that you make an informed decision, you should read this booklet and consider the details carefully. If you are in any doubt as to the action you should take, you should consult your financial, taxation or other professional adviser.

Further information

If you have any further queries in relation to the Buy-Back, please contact our dedicated enquiry line on 1300 727 634 from within Australia and on 613 9946 4447 from outside Australia.

Important Notice

Not for distribution or release in the United States or Canada

The information contained in this website does not constitute, of form part of, any offer or invitation to sell, or any solicitation of any offer to purchase any securities in any jurisdiction, nor shall it or the fact of its release be relied on in connection with any contract thereof. No indications of interest in Buy-Back are sought by this website. Shareholders who are (or nominees who hold Santos Limited shares on behalf of or for the account of persons who are) in the United States or US persons (within the meaning of Regulation S under the United States Securities Act 1933), residents of Canada or who are otherwise excluded foreign persons will not be eligible to participate in the Buy-Back described in this website. In addition, ADRs, Restricted Employee Shares and Shares issued under the DRP with respect to the 2008 interim dividend may not be tendered into the Buy-Back. Buy-Back documents, including the booklet describing the terms of the Buy-Back and tender forms, when issued, will not be distributed or sent into the United States or Canada.

Forward looking statements

This website contains forward looking statements, including statements regarding the implementation of the Buy-Back and its effects on our business and securities. The results and effects of the Buy-Back may differ materially from those expressed in, or implied by, these forward looking statements. Factors that could cause or contribute to such differences include the number of shares bought back, the Buy-Back price and the general trading and economic conditions affecting our business. We do not undertake any obligation to revise these forward looking statements to reflect any future events or circumstances.