It’s been a very busy 9 months for the big Australian starting with the unification of its structure and we’re now approaching the divestment of its petroleum division which is due for completion in June. Woodside released their documentation to the deal on Friday with the key details as follows:
- Based on the agreed merger terms with WPL, BHP will own 48% of the expanded WPL amounting to $30bn. WPL is making the ~$30bn consideration via WPL shares (918.4m) & the ATO has ruled that BHP can pass thru this payment to BHP shareholders in the form of a BHP dividend (albeit in the form of WPL shares). Importantly, this dividend will be fully franked – we estimate the franking value adds ~A$2.50/share.
- Based on BHP’s current share count and the current WPL share price, BHP shareholders are expected to receive a dividend (in the form of WPL shares) of around A$6/share.
- Key dates, WPL scheme vote: 19 May, Ex-date: Wednesday 25 May, Completion Date: Wednesday 1 June i.e. WPL takes over the keys to BHP Petroleum
NB: The cost base of the new WPL shares will be based on the closing price on 31 May 2022.