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Ann: Merger update and details of Woodside share distribution, page-57

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09/04/22

23:23

Post #: 60762694
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Originally posted by curiouswon: ↑

Hey@Gazza14u
Re your worked example - please note that you do not get the AUD equivalent of the USD$4.62 cash dividend per share (approx AUD$6.19) - it is deemed to be paid to you but then used by you to pay for your new WPL shares - you never see this money.
What you get (from your example with starting point of 1000BHP (then including BHPP) shares):

INCOME ACCOUNT:
Taxable income (to be advised to ATO): dividend USD6.6 x 1000 USD6600 = ~AUD$8840
Tax Paid (as franking credit that can be used to offset tax payable): ~AUD$2650 [being USD1.98 ie approx AUD2.65 (at exchange rate of 0.7466)]

CAPITAL ACCOUNT:
Retain 1000 BHP shares (noting that this BHP no longer includes BHPP, and there is no capital reduction to your BHP cost base since your new WPL shares were bought by you from a dividend, and no CGT event has occurred)
Get 181 WPL Shares (value as you note at current sp of $32.40 is $5864.40) (not a CGT event, but 01/06/22 is the "purchase date" for future CGT purposes, and your cost base/purchase price for future CGT purposes is AUD$6190 ie AUD$6.19x1000 which is about AUD$34.20 per new WPL share

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Thank @curiouswon, your explanation regarding BHP and WPL costs helps me alot

Originally posted by annep: ↑

Hi Jaykay1320,

1. BHP holders get 1 WPL share for every 5.534 BHP shares held at the record date.
2. WPL shareholders get the O&G assets of BHP
3. 1000 BHP holders get, from BHP, 180 WPL shares (note the documents state this sum is rounded down) Note prior to this WPL issues new shares to BHP in exchange for BHP's O&G assets with some unders and offers including net cash flow adjustments etc
4. The 180 WPL shares are actually an inspecie distribution from BHP, called a dividend, and have franking credits attached. See BHP's News Release 11/22 under 'Highlights' on page 1. Note the dividend is NOT paid by WPL as point 3 above.. the new WPL shares have already been issued to BHP by this point in the process.
5. No of shares held by a WPL shareholder will only change if you hold BHP shares at the record date. If no BHP shares are held your number of WPL shares remains unchanged.
6 In the example given by BHP, and based on WPL's share price in USD on 6 April 2022, the value of WPL shares comprise 70% of the so called 'dividend', and the franking credits 30%. In the example under 'Highlights' BHP shareholders would receive per BHP share USD$4.62 of WPL shares plus the franking credit of US$1.98. The gross figure, based on yesterday's FX, would be AUD$8.85 for each BHP share. For taxation purposes you would have AUD $8.85 grossed up income per BHP share, of that the franking credit would be $2.65 AUD per BHP share.

Just a pity in the 1000 odd pages from both parties there is no worked example.

Any one else out there, please expand, explain etc further.

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Thank @annep, your explanation regarding BHP and WPL costs helps me alot

BHP Price at posting: $51.94 Sentiment: Buy Disclosure: Held
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