Woolworths (ASX:WOW) share price edges lower following share buy-back completion

The company’s shares are heading south today…

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The Woolworths Group Ltd (ASX: WOW) share price is edging lower during Monday morning trade. The retail conglomerate released an announcement regarding its off-market share buy-back.

At the time of writing, Woolworths shares are swapping hands for $40.11, down 0.15%. It’s worth noting that its shares are within sight of breaking their all-time high of $42.66 reached on 20 August.

Let’s take a closer look into what the company provided to the ASX.

Woolworths completes share buy back

In today’s statement, Woolworths advised it has successfully completed its $2 billion off-market share buy-back.

Management determined the final market price to come at $40.06 for each Woolworths share. This represents a 14% discount on the 5-day volume-weighted average price (VWAP) to the closing price on 15 October.

Eligible shareholders will receive $34.46 for each share, including a capital component of $4.31 and a dividend component of $30.15.

The transaction involves 58 million Woolworths shares or 4.6% of the entire issued capital.

Due to strong demand, the buy-back was scaled down by 81.2% to minimise disadvantaging shareholders with small holdings. For those who had 180 shares or less as a result, Woolworths noted it will buy back all of these shares.

However, for shareholders with more than 180 shares, the company will buy back 18.8% of the shares offered.

Woolworths group chief financial officer, Stephen Harrison said:

We are very pleased to have successfully completed the share buy-back, returning $2 billion of capital to shareholders, as foreshadowed at the time of the Endeavour Group demerger. Woolworths Group remains well-positioned to pursue our future growth aspirations, given the strength of the Group’s balance sheet.

Woolworths share price snapshot

It’s been a modest 12 months for Woolworths shares, increasing in value of around 15% over the period. The company’s share price has been relatively steady along the way, despite taking a dive during the “September effect”.

Woolworths commands a market capitalisation of about $51 billion and has 1.27 billion shares on its registry.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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