The Caltex Australia Ltd (ASX: CTX) share price has opened lower this morning after announcing the successful completion of its $260 million off-market share buyback.
What did Caltex announce to the market?
Caltex announced that due to very strong demand for the buyback, an 86.86% scale back of successful tenders was required.
The key outcomes of the buyback include:
- Size of the buyback: $260.2 million
- Market price: $27.2441 per share
- Buyback discount: 14.0%
- Buyback price: $23.43
- Capital component: $2.01
- Fully-franked dividend component: $21.42
- Number of shares bought back: 11.1 million
- Percentage of issued capital: 4.26%
- Scale back: 86.86%
Caltex announced that all shares purchased by Caltex will be cancelled, and that it has requested a Class Ruling from the ATO in relation to the tax implications of the buyback.
The finalisation of the program follows last week's announcement which reported strong margins and sales from production for the March 2019 quarter.
Is Caltex in the buy zone?
The Caltex share price is up 9.1% so far this year but its performance has paled in comparison to the likes of fellow ASX oil and gas giants Beach Energy Ltd (ASX: BPT)or Santos Ltd (ASX: STO).
A supply shortage in domestic gas markets has kept pricing high for the oil and gas giants in Australia while oil prices recently reached 5-month highs on the back of conflict in Libya and OPEC-led supply cuts.
There is a case for a relative value play, as Caltex's 12.8x P/E ratio is well below that of both Santos (16.8x) and Beach (23.5x).
For those who want more aggressive growth positions, this top-rated stock could boost portfolio gains as it continues to soar in a $22 billion industry.
