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IMB Announces Off-Market Share Buyback and Final Dividend for 2011-12

On 30 May 2012, and following an external review, IMB announced its intention, subject to meeting certain conditions, to undertake a series of annual share buybacks over the medium to long term.

Further to that announcement, IMB’s Board is pleased to announce the details of the first in this proposed series of annual buybacks under which it presently intends to buy back up to $14 million worth of its ordinary shares on issue through an off-market tender (“Buyback”).

Details of the Buyback are outlined below.  Full terms of the Buyback will be detailed in a booklet which will be mailed to eligible participants by 10 August 2012.

The Board has also declared a final fully franked dividend for 2011-12 of 15.0 cents per share, taking the full year dividend to 25.0 cents. The dividend will be paid on Friday 07 September 2012 to holders of shares on that date.

 

Details of the Buyback

The Buyback is open to all eligible IMB shareholders.  In general, shareholders who are registered holders of IMB shares on 03 August 2012 and are resident in Australia or in countries in which IMB determines it is lawful for it to issue the invitation to eligible shareholders to participate will be eligible to participate.

Participation in the Buyback is voluntary.  The tender process provides flexibility for shareholders because they can tailor their level of participation to suit their own circumstances.

Under the proposed tender process, eligible shareholders may tender some or all of their shares for sale at discounts of between 5% and 10% inclusive (at 1% intervals) to the volume weighted average price of IMB shares over the 10 days on which IMB shares have traded prior to 31 July 2012 of $3.19, adjusted for the movement in the S&P/ASX Small Ordinaries index from 31 July 2012 (the announcement of the buyback) to 19 September 2012 (the closing date of the tender period).  Shareholders may also tender their shares as a final price tender, which is an election to receive the final Buyback price as determined by IMB.  In addition, shareholders can make their tender conditional upon one of three specified minimum prices.

When the tender period closes, IMB will determine the final Buyback price based on the largest discount that will enable IMB to purchase the amount of capital it decides to buyback.  While IMB intends to buy back up to $14 million worth of shares, it may buy back a smaller number of shares or no shares at all.

IMB may buy back shares tendered at a discount greater than, or equal to, the final discount (or as a final price tender), subject to any scale back requirements.  The scale back has been structured to ensure that eligible shareholders with small holdings are not disadvantaged.

All shareholders whose tenders are successful will receive the same Buyback price.  No share trading administration fee will be payable by shareholders who choose to participate in the buyback.

 

2011/12 Financial Performance

IMB expects to release its financial results for the year ended 30 June 2012 during the tender period. You may wish to review these results when deciding whether to participate in the Buyback. Announcement of the financial results will be made on IMB’s website by 31 August 2012.

 

Tax Considerations

For Australian tax purposes, the Buyback price is expected to comprise:

  • a capital component of $1.18 per share; and
  • a fully franked dividend component equal to the Buyback price less $1.18.

For capital gains tax purposes, the sale consideration received by IMB’s shareholders is expected to be the Buyback price less the dividend component.

For some of IMB’s shareholders, depending on their individual circumstances, the after tax proceeds from participating in the Buyback may be greater than that from a sale of their shares on the IMB Market.  The Buyback will have different tax consequences for different shareholders and shareholders should obtain their own tax advice to take account of their particular circumstances.

 

Buyback Timetable

   

31 July 2012

Announcement of Buyback

03 August 2012

Record Date.  Shares acquired after this date will not confer an entitlement to participate in the Buyback

10 August 2012

Completion of mail out of Buyback documents to eligible shareholders entitled to participate in the Buyback

16 August 2012

The tender period opens

19 September 2012

Closing date.  Tenders must be received by IMB by no later than 5.00pm (AEST)

21 September 2012

Buyback date.  Announcement of the Buyback price, the number of shares being bought back and any scale back

28 September 2012

Buyback proceeds despatched to successful participants by direct credit to their nominated account

 

While IMB does not expect any changes to these dates, it reserves the right to change them without prior notice.

 

Further Information

Further information about the Buyback can be found in the Buyback booklet which will be mailed to eligible shareholders and will be on IMB’s website at www.imb.com.au.

If shareholders have any questions in relation to the Buyback, please call the Buyback information line on 1300 585 271 from within Australia or 61 2 4298 0190 from outside Australia between the hours of 9.00am to 5.00pm (AEST), Monday to Friday.


 

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