Successful Off-Market Buy-Back Completion Of A$2,871 Million By Rio Tinto Limited

  • Nov 12, 2018 AEDT
  • Team Kalkine
Successful Off-Market Buy-Back Completion Of A$2,871 Million By Rio Tinto Limited

Achieving its share purchase target of approximately 41.2 million Rio Tinto Limited shares, for a total consideration of A$2,871 million, Rio Tinto has successfully completed its off-market buy-back. A discount of 14 percent to the Market Price was represented by the Buy-Back Price which was A$69.69 per Share. 

Through this off-market buy-back, the company is delighted to be returning US$2.1 billion to the Rio Tinto Limited shareholders. To return the maximum amount, and at a discount of 14 percent, this has been enabled by Strong demand. Through the ongoing buy-back of Rio Tinto plc shares the remaining US$1.1 billion of funds will be returned. In 2018, RIO Tinto has announced cash returns of approx. US$6.4 billion to the shareholders. The strategic focus, with disciplined allocation of capital, is ensuring that they continue to deliver superior returns to their shareholders in the short, medium and long term, said J-S Jacques Rio Tinto chief executive.

On 20 September 2018 as part of a US$3.2 billion share buy-back programme the Rio Tinto Limited Buy-Back was announced to the Australian Securities Exchange, returning the post-tax proceeds from the sale of coal assets in 2018 to Rio Tinto shareholders. At an aggregate cost of A$2,871 million or US$2,081 million, Rio Tinto Limited bought back 41,198,134 Shares which represents 9.99 per cent of Rio Tinto Limited's issued ordinary shares or 2.41 percent of the Rio Tinto Group’s issued ordinary shares. Rio Tinto Limited’s issued share capital will stand at 371,216,214 shares, following completion.

Relating to the on-market buy-back of Rio Tinto plc shares the portion of the Programme will now total a maximum amount of US$1,119 million and will commence on 28 February 2019 and will be completed no later than 28 February 2020.

A 58.27 percent scale back of tenders was required, due to the significant oversubscription for the Buy-Back. Shareholders who tendered their shares at a 14 percent Tender discount to the Market Price or as a Final Price Tender will have a Priority Allocation of 70 shares bought back before the scale back is applied subject to exclusions set out in the Buy-Back Booklet.

As a result of the Priority Allocation and scale back, successful shareholders will have all of their shares bought back in full, those who tendered all of their shares at a 14 percent tender discount to the Market Price or as a Final Price Tender and who would be left with 30 shares or less. These eligible price conditional tenders were included in the scale back calculations since the Buy-Back Price was greater than any Minimum Price. However, shares tendered at discounts less than or equal to 13 percent were not bought back.

RIO Tinto Limited (ASX: RIO) traded at a market price of $82.390 as at November 12, 2018. Over the last 12 months the stock has seen a performance change of 8.83%.


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