IMB plans second off-market buyback

Wollongong building society IMB said over the weekend that it plans to buy back up to A$14 million worth of its ordinary shares through an off-market tender.

It is the second time the board has set out a plan to progressively buy back and cancel all its ordinary shares. This buyback represents about five per cent of IMB's net assets.

Shareholders may tender some or all of their shares for sale at discounts of between eight and 14 per cent to the volume-weighted average price of IMB shares over the 10 days on which IMB shares traded prior to October 8, 2013. This was A$4.50, but will be adjusted for the movement in the S&P/ASX Small Ordinaries index from 8 October to 20 November.

IMB said it will determine the final buyback price based on the largest discount that will enable IMB to purchase the amount of capital it decides to buy back.  

It said all shareholders whose tenders are successful will receive the same buyback price.  

IMB said, for tax purposes, the buyback 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.

It said, for capital gains tax purposes, the treatment of this buyback will be different to that conducted last year, with the sale consideration received by IMB's shareholders expected to be the capital component of $1.18 plus the difference between the buyback price and the Tax Office's view of the deemed market value.