Current Price – A$0.25
Tender Price - A$0.30
Upside – A$85 for odd-lots up to 1666 shares
Expiration Date – 2nd of March, 2018
ASX Announcement This idea was shared by Matt (thank you). This is a similar situation to odd lot tenders in US. Shareholders of 1666 shares or less will be cashed out at A$0.3 vs current market price of A$0.25. Thus odd-lot holders have a chance to collect risk-free A$80 dollars. Not much, but it is given for free. Record date is 6th of March, so shares must be acquired on Thursday or Friday (Australian equities are on T+2 settlement). Distributions will be carried out at the end of April, so there is a two month delay. I am not yet fully sure about the mechanics on how this will be implemented for beneficial holders (announcement does not differentiated between record and beneficial holders, just calls all of them shareholders), but company states:
"Shareholders who hold Unmarketable Parcels will have these bought back by the Group at the Buy-Back Price in full unless they opt out by the closing date of the Facility. Shareholders who participate in the Facility will not have to pay any brokerage or handling fees associated with the buy-back of their shares. All shares bought back by the Group through the Facility will subsequently be cancelled."
More details on the procedure will most probably be announced on the 9th of March. In any case this being Virgin Group company, I assume beneficial shareholders will be treated fairly. If it turns out not to be the case shareholders will have a chance to opt-out from 'Facility' before 13th of April. If any of the members have participated in similar Australian tenders and can shed some light on the process, that would be helpful. Also there should not be any issues regarding taxation:
"In the Group’s view, proceeds from the Facility will be entirely treated as a return of capital, resulting in a Capital Gains Tax event for most shareholders, unless shares are held on revenue account. It is the Group’s view that no portion of the proceeds that participating shareholders receive from the Facility will be treated as a dividend for tax purposes. "