Qantas Airways Limited (ASX: QAN) off-market buyback: opens Monday 23 September 2019

On 22 August 2019, Qantas Airways Limited (ASX: QAN) announced plans to buy back up to 79.7 million of its shares through an off market share ‘buyback’. Eligible shareholders are able to apply for this offer through us, or directly through the Qantas Airways Limited Share Registry.

What is a buyback?

A buyback is when a company buys its own outstanding shares, to reduce the number available on the open market. This could be for a number of reasons, including to increase the value of those shares remaining by reducing supply. Qantas has said that they are doing this to distribute surplus capital and franking to their shareholders.

How to participate in the Qantas Airways Limited buyback

Qantas sent notification to all eligible shareholders on 11 September 2019. If eligible, you will be able to sell some or all of your Qantas shares:

  • at a discount of between 10%-14% (inclusive), at 1% intervals of the market price1, or
  • at a buyback price, to be determined by Qantas following completion of the tender process.

In addition to the above options, you can also decide to offer a ‘minimum price’. This can be any amount determined by you - please note however that Qantas may or may not accept your offer.

As part of the notification, Qantas has sent an information booklet and buyback offer form. Please read this information thoroughly, and if you wish to proceed, apply via one of the following methods:

  • The preferred and most efficient method for all shareholders is to accept the offer online before 7pm (Sydney Time) 1 November 2019. To do this, please visit investor.qantas.com and follow the prompts.
  • Alternatively, you can contact us by phone or email before 5:00pm (Sydney Time) 1 November 2019, or by post (must be received before 1 November 2019)

Impact to CommSec Adviser Services Investment Lending customers

If you are holding Qantas shares as collateral on your CommSec Adviser Services Investment Loan, please be aware that acceptance of the buy-back offer may lead to a margin call position. Please ensure that there are sufficient funds available on the loan to facilitate participation without a margin call occurring.

If you would like to discuss how this may impact your CommSec Adviser Services Investment Loan, please call us on 1800 252 351, option 3 (8:30am to 6:00pm, Monday to Friday, AEDT) or email us at InvestmentLending@cba.com.au.

Important information for Exchange Traded Option customers

If you have Qantas shares currently lodged as collateral for your Exchange Traded Option positions, you will need to contact us to recall the stock before accepting the Buy-Back offer.

Please be aware that you will be required to provide other stock or cash collateral to cover your Option positions.

Important dates2:

Event Date (2019)
Buy-Back Ex-Entitlement Date: the date that Shares commence trading on an ex-Buy-Back basis. Shares acquired on the ASX on or after this date will not confer an entitlement to participate in the Buy-Back Monday, 2 September
Offer period opens
Distribution of invitations to Eligible Shareholders to participate in the Buy-Back is expected to be completed
Monday, 23 September
Offer period closes
Offer Forms must be submitted online or received by the Share Registry no later than 7.00pm (Sydney time)
Friday, 1 November
Buy-back date
The date that the Buy-Back Price and scale back (if any) are announced and Buy-Back Contracts are entered into
Monday, 4 November
Buy back price paid to successful eligible shareholders Monday, 11 November

Further information

If you have any enquiries regarding the Off-Market Buy-Back, please contact the dedicated enquiry line on 1800 177 747 (within Australia) or +61 2 8767 1195 (from outside Australia) between 8:00am and 7:00pm (Sydney time, Monday to Friday).

Important information

  1. The market price is the current price at which an asset or service can be bought or sold. The maximum buy-back discount is 14% as this is the maximum allowed by the Australian Taxation Office (ATO).
  2. Please refer to the buyback booklet for the full timetable.

Australian Investment Exchange Limited (the Participant) ABN 71 076 515 930 is licensed under the Corporations Act, Australian Financial Services License No 241400 and is a market Participant of the Australian Securities Exchange Limited (ASX) and Chi-X Australia Pty Ltd, a clearing participant of ASX Clear Pty Limited and a settlement participant of ASX Settlement Pty Limited.

This information is not advice and has been prepared without taking account of the objectives, financial or taxation situation or needs of any particular individual. For this reason, any individual should, before acting on this information, consider the appropriateness of the information, having regards to the individual's objectives, financial or taxation situation and needs, and, if necessary, seek appropriate professional advice.

The Participant is not an adviser as to legal, taxation, or accounting matters. The Participant shall not be responsible in any way whatsoever to any person or company for any errors or omissions in this document, however caused. You are responsible for obtaining independent advice, as you think appropriate, on your tax position.

Published: 1 October 2019