How does the BHP Billiton (BHP) Woodside Petroleum (WPL) deal actually work?
BHP and Woodside have agreed a deal whereby Woodside will acquire BHP’s Petroleum business. BHP shareholders will receive payment in WPL shares with BHP shareholders set to own around 48% of the combined entity.
The scheme documentation will be released in March, Shareholder voting happens in April with BHP’s divestment into this expanded WPL to complete in May (JQ22). Based on the specific NewCo ownership ratio, as at COB 2nd March 2022, BHP shareholders are to receive $5.07/BHP share in Woodside stock with the transaction likely to complete this FY.
The $5.07 (as at 2nd March 2022 & subject to changes in share prices) has attached franking credits. So, in simple rounded terms, ~10% of our BHP shareholding will become WPL stock, our cost base of BHP will not change given it’s not a demerger, with the cost base for WPL shares being the closing price the day before new shares are issued.
The franking credits stapled to the $5.07 worth of WPL stock is worth a further ~$2.17.
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