BHP buyback in pension phase

I don’t think the BHP buyback for super funds in pension phase is necessarily a no brainer as suggested.

  1. The shares sold don’t qualify for the special div (whatever that may be).
  2. The franking component of the buyback is not received for nearly 12 months (when tax return lodged).
  3. If you want to repurchase shares sold you will have considerably less cash (14%) with which to purchase and I would guess the shares cost would rise due to expectation of the special dividend and less shares held overall.
  1. Yes, shares sold in the buyback won’t qualify for the special dividend. The latter will be around US$1.00 (about A$1.39) per share, and have franking credits of A$0.60. After the shares go ‘ex-dividend’, the share price will fall by approximately the dividend amount;
  2. Yes, when you receive the cash refund depends on when you lodge your SMSF annual return. Potentially, this can be lodged from July 2019;
  3. Yes, you will have (until receipt of the cash refund) less cash – approx. 14% less. When you get the cash refund, you will have considerably more.

    A: Still a ‘no-brainer’ in my mind.


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