Ampol shares jumped to an eight-month high yesterday after the oil group announced a $300 million off-market buyback on the completion of its retail convenience property sale.
The capital management move has been expected now but the announcement surprises with a higher than expected price for the sale. Ampol shares jumped to $30.97, the highest since March this year and closed up 4.6% at $29.75.
Ampol ( formerly Caltex Australia) told the ASX on Monday that it had closed the sale of 49% share of its freehold retail convenience sites to Charter Hall and Singapore’s GIC for $635 million. That was more than the previously announced $612 million guidance.
The sale was revealed in August and the higher price represents better trading conditions since then as pandemic-related lockdowns have been eased and people have started travelling more.
That will see Ampol use the proceeds not only to reduce debt – but also to return capital to shareholders and pursue “appropriate growth opportunities”.
The buy-back will conducted by way of an off-market tender process from Monday, December 7 to Friday, January 22.
The record date for the buy-back is this Friday, November 27.
“We have delivered on our stated 2019 plan to unlock value through network optimisation and I am pleased the completion of the property transaction will further strengthen our balance sheet while allowing us to return capital and release franking credits,”CEO Matthew Halliday said in Monday’s statement.
“The property transaction has complemented the resilient performance of the business in a tough environment and the strong action we have taken to protect cash flows in response to COVID-19.”
The buyback was confirmed ahead of an investor day yesterday for Ampol.
This biggest unanswered question is the future for the company’s Lytton refinery in Brisbane which has been revamped this year but is now under review with the decision due by June next year.
