My point is that most share popular buy backs (e.g BHP, TLS) have been at a 14% discount to the VWAP and even then been a scale back (at 14%) due to their popularity with people (and SMSF) who pay no tax. A bayback is not worth a 14% discount if (as under the Labor proposal) if the franking credits are an allowance against tax - they need to be (at least for SMSF's) a rebate since people in retirement phase pay no tax (i.e a tax credit is worthless under the labor proposal. For all shareholders it is advantageous to buyback shares offered at the maximum discount (i.e 14%) this doesn't make sense unless the franking credit is rebated as cash to those who (including SMSF's in draw down mode with less about $2m in assets) that pay no tax. If WPL leave a buyback to after 30 June 2020 they will not get th 14% discount because there will not be buyers at this discount (i.e the incentive is removed by the Labor proposal). Consequently to get maximum for all shareholder is to distribute the $2bn of franking credits prior to 30 June 2020 if Labor gets in in May 2019.
Happy New Year to all
WPL Price at posting:
$31.91 Sentiment: Hold Disclosure: Held
