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BHP Group Limited (JSE:BHG) News - Merger update and details of Woodside share distribution
BHP Group Limited
BHP Group Limited ABN 49 004 028 077
Registered in Australia
Registered Office: Level 18, 171 Collins Street Melbourne VIC 3000
Share code: BHG
ISIN: AU000000BHP4
NEWS RELEASE
Release Time IMMEDIATE
Date 8 April 2022
Release Number 11/22
Update on BHP Petroleum and Woodside merger and share distribution information
BHP Group (BHP) and Woodside Petroleum Ltd (Woodside) entered into a share sale
agreement (SSA) for the merger of BHP’s oil and gas portfolio with Woodside by an all-stock
merger (Merger) on 22 November 2021. On completion of the Merger, the combined company
is expected to have a high margin oil portfolio, long life LNG assets and the financial resilience
to help supply the energy needed for global growth and development over the energy
transition.
Woodside has today published an explanatory memorandum and notice of meeting for the
Woodside shareholder vote scheduled for 19 May 2022. Woodside has also released the
Independent Expert’s Report prepared for Woodside shareholders, which has concluded that
the Merger is in the best interests of Woodside shareholders, in the absence of a superior
proposal.
This announcement contains information relevant for BHP shareholders in respect of the
Merger and the proposed in specie dividend of Woodside ordinary shares (Woodside Shares)
to BHP shareholders.
Highlights
• Completion of the Merger is on track and is targeted for 1 June 2022, subject to
satisfaction of conditions precedent including approval by Woodside shareholders.
• BHP is expected to receive 914.8 million newly issued Woodside Shares at
completion and determine a fully franked in specie dividend of the Woodside
Shares to BHP shareholders.
• BHP shareholders are expected to be entitled to one Woodside Share for every
5.5340 BHP shares they hold on the Record Date.
• Based on Woodside’s share price of US$25.55 at 6 April 2022, the implied value of
BHP Petroleum is US$23.4 billion. At this valuation, which is subject to change, the
in specie dividend would be US$4.62 with US$1.98 of franking credits being
distributed per BHP share (US$10.0 billion of franking credits in total).
• Woodside will retain its primary listing on the ASX and is seeking a standard listing
on the LSE and a sponsored Level III ADR program on the NYSE from completion
of the Merger.
• A share sale facility will be in place for eligible small BHP shareholders who elect
to participate, and for shareholders who are ineligible to receive Woodside Shares.
1
Merger continues to progress
Completion of the Merger is targeted for 1 June 2022 subject to conditions precedent being
satisfied including:
• approval by Woodside shareholders at the Woodside general meeting scheduled for
19 May 2022;
• KPMG Corporate Finance (in its capacity as Woodside’s independent expert) not changing
its conclusion that the Merger is in the best interests of Woodside’s shareholders; and
• approval by the National Offshore Petroleum Titles Administrator (NOPTA).
All required regulatory and competition approvals have been obtained, other than the NOPTA
approval which is expected prior to completion. If a condition precedent has not been satisfied
or waived by 30 June 2022 either party may terminate the SSA, unless the parties agree to
extend the deadline (which they must consider in good faith).
Woodside disclosure documents1
Woodside has today published an explanatory memorandum and notice of meeting for the
Woodside shareholder vote to approve the Merger. The Woodside shareholder meeting is
scheduled for 19 May 2022.
In addition, Woodside expects to publish the following documents in mid-April 2022:
• United Kingdom prospectus (Woodside UK Prospectus), which has been produced in
connection with Woodside’s application for admission of all of its ordinary shares to the
standard listing segment of the Official List and to trading on London Stock Exchange’s (LSE)
Main Market for listed securities; and
• United States registration statement under the US Securities Act of 1933 (Woodside US
Registration Statement) and Woodside has applied to list its American depositary shares
representing Woodside Shares (Woodside ADSs) on the New York Stock Exchange
(NYSE).
These documents include information on the Woodside Shares that are intended to be
distributed to BHP shareholders in connection with the Merger via a BHP in specie dividend,
and it is expected that they will be made available (once published) at
https://www.woodside.com.au/investors/woodside-and-bhp-proposed-merger. The Woodside
UK Prospectus is also expected to be submitted by Woodside to the UK National Storage
Mechanism and available in due course at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
In specie dividend of Woodside Shares to BHP shareholders
On completion, BHP is expected to receive 914,768,948 Woodside Shares as consideration
for the sale of BHP Petroleum. BHP intends to determine a fully franked in specie dividend and
distribute the Woodside Shares to BHP shareholders on the basis described below.
1
The Woodside disclosure documents described in this announcement have been issued by, and are the responsibility of, Woodside other than to
the extent that another party has positively and expressly accepted responsibility for information in such documents.
2
The dividend is expected to be paid on 1 June 2022 to each BHP shareholder on the BHP
register2 at the close of business on 26 May 2022 (Record Date). BHP shareholders will be
entitled to a pro-rata share of the Woodside Shares received by BHP based on the number of
BHP shares they hold on the BHP register on the Record Date.
The current estimate of the dividend entitlement is that BHP shareholders will receive one
Woodside Share for every 5.5340 BHP shares. BHP shareholders will be entitled to a whole
number of Woodside Shares, with any entitlement to a fraction of a Woodside Share that would
have otherwise arisen being rounded down to the nearest whole number.
The rounding treatment in respect of shares held on behalf of BHP UK depositary interests
(DIs) holders and shareholders on the BHP South African branch share register will be based
directly on the DIs or shares held, respectively.
The arrangements governing the American depositary shares (each representing two fully paid
BHP shares) (BHP ADS) and the BHP CSN Facility3 contemplate rounding of entitlements,
and the rounding of the in specie dividend will occur according to the terms and conditions of
those arrangements respectively.
Based on Woodside’s share price of US$25.554 at 6 April 2022, the implied value of BHP
Petroleum is US$23.4 billion. At this valuation, which is subject to change, the in specie
dividend would be US$4.62 with US$1.98 of franking credits being distributed per BHP share
(US$10.0 billion of franking credits in total).5
Following payment of the dividend, BHP shareholders will receive their standard form of BHP
dividend statement which will provide details of their specific entitlement to the in specie
dividend.
The proposed in specie dividend will not be eligible for the BHP dividend reinvestment plan.
Eligibility to receive Woodside Shares
Most BHP shareholders will be eligible to receive the Woodside Shares distributed to them
under the in specie dividend.
However, there are certain jurisdictions where the distribution of Woodside Shares by BHP is
difficult or not permitted. BHP shareholders that have an address registered in the BHP register
in these jurisdictions6 will have the Woodside Shares to which they are entitled sold via a Sale
Facility7, with the cash proceeds determined under the Sale Facility being remitted to them
(Ineligible Overseas Shareholders).
2
The BHP register comprises the BHP Australian principal share register (comprising both the issuer sponsored sub-register and CHESS
sponsored sub-register), the BHP depositary interest register and the BHP South African branch share register (without double counting the
shares held on the Australian principal share register on behalf of the BHP depositary interest holders or those on the South African branch share
register). A reference to “BHP shareholder” in this announcement is a reference to any person registered in the BHP register.
3
A CSN Facility is the corporate sponsored nominee facility arranged by the relevant company with Computershare Investor Services PLC to hold
DIs in the company for and on behalf of participants in, and on terms and conditions that govern, the facility.
4
Based on Woodside’s share price of A$33.74 at 6 April 2022 converted at an exchange rate of AUD/USD 0.7572.
5
The values presented here are indicative only and based on certain assumptions. The implied value of BHP Petroleum is based on BHP
shareholders’ share of the enlarged Woodside market capitalisation. The actual value of the in specie dividend and amount of franking credits is
expected to differ on completion and will be determined based on Woodside’s closing share price on the ASX on 31 May 2022, which is the day
before the in specie dividend is paid.
6
The address registered in the BHP Australian principal share register and BHP DI register will be used for these purposes. For shareholders on
the South African branch share register, if you do not communicate to your CSDP that you are an Eligible SA Shareholder (as defined below), you
will be assumed to be ineligible. BHP DI holders holding through the BHP CSN Facility will be treated as eligible to participate. BHP ADS holders
will be treated as eligible to participate.
7
The sale facility is the facility organised by BHP pursuant to a Share Sale Facility Agreement under which a sale agent, J.P. Morgan Securities
Australia Limited or one of its affiliates, will sell the Woodside Shares represented by (i) the aggregate of all fractions of a Woodside Share that are
subject to the rounding treatment described above to ensure each BHP shareholder receives a whole number of Woodside Shares; (ii) the
3
BHP shareholders whose address is registered on the BHP register on the Record Date in one
of the following jurisdictions (Eligible Shareholders) will be eligible to have the Woodside
Shares distributed to them: Australia, Canada, Chile, France, Germany, Ireland, Italy, Japan,
Jersey, Luxembourg, Malaysia, Netherlands, New Zealand, Norway, Singapore, Spain,
Sweden, Switzerland, United Arab Emirates, United Kingdom and United States. BHP
shareholders with a registered address in all other jurisdictions will be Ineligible Overseas
Shareholders (except certain South African BHP shareholders who validly elect to receive
Woodside Shares, as described below).8, 9
Certain small BHP shareholders can also elect to participate in the Sale Facility and have the
Woodside Shares to which they are entitled sold and the cash proceeds determined under the
Sale Facility remitted to them (shareholders validly electing to do so being Selling
Shareholders).
Cash payment between Woodside and BHP on completion
Separate to the receipt of Woodside Shares, on completion:
• Woodside will make a cash payment to BHP of approximately US$830 million in relation to
cash dividends paid by Woodside between the Merger effective date of 1 July 2021 and
completion. This represents the cash dividend that would have been received by holders
of the Woodside Shares issued pursuant to the Merger had they been on issue on and
from the effective date.10
• BHP will make a cash payment to Woodside for the net cash flow generated by BHP
Petroleum between the Merger effective date of 1 July 2021 and completion (Locked Box
Payment). From the effective date to 31 December 2021 only, this amounts to
approximately US$900 million and the Locked Box Payment at completion will include the
additional net cash flow generated by BHP Petroleum to the completion date. The Locked
Box Payment will be reduced by the amount of cash remaining in BHP Petroleum at
completion.
Where applicable, these amounts will be netted off.
dividend entitlement of Ineligible Overseas Shareholders; and (iii) Eligible Small BHP shareholders who have validly elected to have the Woodside
Shares to which they are otherwise entitled sold via the Sale Facility. This Sale Facility is described in further detail below.
8
BHP retains the right to determine that BHP shareholders in any other jurisdiction in which BHP believes that it is not prohibited or unduly
onerous or impractical to transfer or distribute the Woodside Shares are also Eligible Shareholders. Any participant in BHP employee share plans
on the Record Date who are entitled to the distribution but whose addresses are shown in the employee share trust’s or nominee’s register on the
Record Date as being in a jurisdiction outside of the jurisdictions described above will also be Ineligible Overseas Shareholders. South African
shareholders should refer to the section on “What happens to South African resident BHP shareholders?”
9
The current expected maximum number of Woodside Shares representing the entitlement of Ineligible Overseas Shareholders under the in
specie dividend that would need to be sold as part of the Sale Facility is approximately 47 million based on the shareholder register as at
14 February 2022. This may vary depending on the BHP register as at the Record Date and could also be lower where South African BHP
shareholders validly elect to receive the Woodside Shares to which they are entitled.
10
BHP is entitled to approximately US$1.2 billion in relation to dividends paid by Woodside between the Merger effective date and completion.
Approximately US$830 million of this amount will be paid in cash with the balance, which results from the take-up of Woodside’s dividend
reinvestment plan, factored into the 914.8 million of Woodside shares issued to BHP at completion.
4
Indicative timetable
Below are the indicative key target dates for completion and the in specie dividend.
Milestone Time (all dates in 2022) Time zone
Expected publication of Woodside’s UK Prospectus and Woodside Week commencing AEST
US Registration Statement on the ASX Monday 11 April
Woodside general meeting to vote on whether to approve the 12:00pm, Thursday 19 May AEST
Merger
Last day BHP shares trade on JSE cum-entitlement to Woodside Monday 23 May SAST
Shares11
Last day BHP shares trade on ASX and LSE, and BHP ADS on Tuesday 24 May AEST, BST,
NYSE, cum-entitlement to Woodside Shares (in each time zone) EDT, SAST
First day BHP shares trade ex-dividend on JSE
First day BHP shares trade ex-dividend on ASX and Commencement of trading AEST, BST,
LSE, and BHP ADS on NYSE Wednesday 25 May EDT
(in each time zone)
Sale Facility election deadlines:
BHP shareholders on the Australian principal share register 5:00pm, Tuesday 24 May AEST
BHP DI holders in the BHP CSN Facility (return form) 1:00pm, Thursday 26 May BST
BHP DI holders in CREST (submit and settle Transfer to Escrow 1:00 pm, Tuesday 31 May BST
instruction)
Record Date for:
BHP shareholders on the Australian principal share register 7:00pm, Thursday 26 May AEST
BHP shareholders on the South African branch share register 5.00pm, Thursday 26 May SAST
BHP DI holders on the UK DI register 6:00pm, Thursday 26 May BST
BHP ADS holders 5:00pm, Thursday 26 May EDT
South African BHP shareholder or DI holder election
deadlines:
BHP shareholders on the Australian principal share register 5:00pm, Tuesday 24 May AEST
BHP shareholders on the South African branch share register 1.00pm, Thursday, 26 May SAST
BHP DI holders on the UK DI register 1:00pm, Tuesday 31 May BST
Completion 8:00am, Wednesday 1 June AEST
In specie dividend payment date 1:30pm, Wednesday 1 June AEST
Commencement of normal trading of:12
New Woodside Shares on ASX Thursday 2 June AEST
Woodside Shares (settled using Woodside DIs) on LSE Monday 6 June BST
Despatch of statements:
Issuer sponsored holding statements and CHESS allotment Thursday 9 June AEST
confirmation notices (sent by Woodside)
Woodside CSN holding statements in respect of new Woodside Thursday 16 June BST
Shares (sent by Woodside)
Despatch of dividend distribution statements for the DI register Thursday 16 June BST
Despatch of dividend distribution statements for the Australian Friday 17 June AEST
principal share register
All dates and times are indicative only and may be subject to change without notice or consultation.
11
This is also the last date on which BHP shareholders can reposition securities between the Australian principal share register, BHP DI register
and BHP South African branch share register. Ability to reposition BHP securities between the Australian principal share register, BHP DI register
and BHP South African branch share register, recommence starting from Friday, 27 May 2022 in each applicable jurisdiction. The last date on
which holders of BHP ADSs will be permitted to surrender their BHP ADSs and withdraw the BHP shares that their surrendered BHP ADSs
represent is expected to be Friday 20 May 2022 (EDT). The BHP ADS Depositary is expected to recommence permitting cancellations and
withdrawals of BHP ADSs from 5:00pm Friday, 3 June 2022 (EDT), following payment of the in specie dividend.
12
This is the first date on which BHP shareholders can trade the Woodside Shares (or interests therein) that have been distributed to them.
Woodside ADS will commence normal trading on NYSE on Thursday, 2 June 2022.
5
Additional information and frequently asked shareholder questions
In what form will BHP shareholders receive Woodside Shares?
The table below describes in what form Eligible Shareholders (who are not Selling
Shareholders) will receive the Woodside Shares and the subsequent confirmation they should
receive regarding their Woodside shareholding.
Location and manner in which How Woodside Shares will be held Default form of confirmation
BHP shares or DIs are held
Australia – BHP shareholders registered on the BHP Australian principal share register
BHP shares on the CHESS13 On the Woodside CHESS sub-register, CHESS allotment confirmation notice
sub-register in the same CHESS account through will be despatched. CHESS holding
which the BHP shares are held. statement will be despatched after the
end of June 2022.
BHP shares on the issuer On the Woodside issuer sponsored sub- Issuer sponsored holding statement
sponsored sub-register register, under the same name and will be despatched.
address under which the BHP shares
are held.
United Kingdom – BHP DI holders registered on the BHP DI register14
BHP DIs held in CREST15 Woodside DIs, credited to the same Credit to the BHP DI participant’s
CREST participant account on the CREST account.
Woodside DI register through which the
BHP DIs are held.
BHP DIs held via the BHP CSN Woodside DIs held via the Woodside Woodside CSN Facility statement will
Facility CSN Facility16, under the same name be despatched.
and address under which BHP DIs are
held through the BHP CSN Facility.
South Africa – Dematerialised holders on the BHP South African branch share register
Dematerialised beneficial Where the eligible dematerialised holder Issuer sponsored statement will be
interests in BHP shares elects to be issued Woodside Shares, despatched.
registered in the name of the they will be issued in the form of shares
STRATE Nominee17 in an on Woodside’s issuer sponsored sub-
account with a CSDP18 or broker register on the Australian principal share
register.
13
CHESS is the electronic transfer and settlement system for securities quoted on the ASX under which transfers are effected in electronic form.
14
BHP DI holders will receive their entitlement in the form of Woodside DIs in the same ratio as BHP shareholders receive Woodside Shares on
the Record Date (subject to the rounding treatment described above). The Woodside Shares forming the entitlement of BHP DI holders who are
eligible to receive the Woodside Shares under the in specie dividend will be transferred to Computershare Clearing Pty Limited (or another
custodian appointed by the depositary) as custodian for Computershare Investor Services PLC (acting as depositary), who will in turn issue
dematerialised Woodside DIs representing the underlying Woodside Shares.
15
CREST is the system for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear in
accordance with the relevant system of which Euroclear is the operator.
16
Further details regarding Woodside’s proposed CSN Facility can be found in Part 19 of the Woodside UK Prospectus.
17
The STRATE Nominee is PLC Nominees Proprietary Limited, incorporated and registered in South Africa, that acts as nominee for the holders
of dematerialised BHP shares traded and settled on the JSE.
18
A Central Securities Depository Participant, being a participant as defined in section 1 of the Financial Markets Act 19, of 2012 (South Africa).
These are the only market participants who can liaise directly with the STRATE Nominee which allows for electronic settlement of BHP shares on
the JSE. This includes the Computershare South Africa CSDP service.
6
Location and manner in which How Woodside Shares will be held Default form of confirmation
BHP shares or DIs are held
United States – BHP ADS holders19
BHP ADS holders registered on Uncertificated Woodside ADSs recorded A credit on the register of Woodside
the BHP ADS Depositary on the register maintained by the ADS holders maintained by the
register in registered form Woodside ADS Depositary under the Woodside ADS Depositary. The
same name and address under which uncertificated BHP ADSs are eligible
the BHP ADSs are held. for direct registration services (DRS)
administered by DTC. The Woodside
ADS Depositary will issue to the
applicable holders a DRS advice
statement reflecting the issuance of
the new Woodside ADSs.
Indirect BHP ADS holders Woodside ADSs indirectly through a Through the procedures of the bank,
through a bank, broker, other bank, broker, other financial institution broker, other financial institution or
financial institution or other or other DTC participant, being the other DTC participant through which
Depository Trust Company same DTC participant account through the Woodside ADSs will be held.
(DTC) Participant. which the BHP ADSs are held.
Eligible Shareholders may not request to receive a different form of Woodside interests from
what they will receive based on the table above and the manner and location of their BHP
shareholding as at the Record Date (but may contact Woodside’s share registry after
completion to explore changing the form of their Woodside interest).
To what extent will BHP shareholders’ information transfer to the Woodside share register?
It is intended that existing dividend currency elections, mandates to bank or building society
accounts and global payment instruction given by BHP shareholders registered on the BHP
Australian principal share register and on the BHP DI register (including the BHP CSN Facility)
in relation to dividends paid by BHP, email addresses and instructions given to BHP in relation
to notices and other communications, notings and any other binding instructions to the extent
applicable, will continue to apply and will, as far as possible, be applied automatically to
Woodside and the Woodside Shares which Eligible Shareholders receive, unless the BHP
shareholder provides alternative instructions to the Woodside share registry after completion.
Australian Tax File Numbers (TFN), TFN exemptions or Australian Business Numbers (ABN)
of BHP shareholders collected on behalf of BHP will not be communicated to Woodside and
will not be carried over to apply to the Woodside Shares that BHP shareholders receive.
Therefore, BHP shareholders that receive Woodside Shares under the in specie dividend
should provide (and are expected to be prompted, on behalf of Woodside, for) their TFN, TFN
exemption or ABN to Woodside after completion.
Woodside may be required to withhold tax (currently at the rate of 47%) on payments of
dividends that are not fully franked and remit the amounts withheld to the Australian Taxation
Office, unless BHP shareholders have provided a TFN, ABN or have informed Woodside that
they are exempt from quoting your TFN or ABN (including because they are a non-Australian
resident).
19
BHP ADS holders will receive a number of Woodside ADS that corresponds to the Woodside Shares received on the BHP Shares represented
by BHP ADSs (subject to payment of taxes and applicable Woodside depositary and BHP depositary fees and expenses). While each BHP ADS
represent two BHP shares, each Woodside ADS represents one Woodside Share. Based on the assumptions described in this announcement,
upon implementation, BHP ADS holders as of the Record Date for BHP ADS, which is expected to be 5:00 pm on 26 May 2022 (EDT), are
expected to be entitled to receive approximately 0.3614 of a Woodside ADS in respect of each BHP ADS owned at that time (subject to payment
of taxes and applicable fees and expenses of Citibank, N.A , acting as the depositary of each of the BHP and Woodside ADSs (the BHP ADS
Depositary and the Woodside ADS Depositary, respectively)). No fractional Woodside ADSs will be issued or delivered to holders of BHP
ADSs.
7
Which small BHP shareholders can participate in the Sale Facility?
Eligible Shareholders on the Record Date:
• who are registered on the Australian principal share register and hold 1,000 BHP shares or
less or on the BHP DI register and hold 1,000 BHP DIs or less20 (Small Shareholder
Threshold);
• whose registered address in the Australian principal share register or BHP DI register is in
any of Australia, Canada, Chile, France, Germany, Ireland, Japan, Jersey, Luxembourg,
Malaysia, New Zealand, Norway, Spain, Sweden, Switzerland, United Arab Emirates and
United Kingdom; and
• who are not, and are not acting for the account or benefit of persons, in the United States,
(Eligible Small Shareholders), may elect to have all (and not some) of the Woodside Shares
to which they would otherwise be entitled pursuant to the in specie dividend sold under the Sale
Facility. Eligible Small Shareholders who validly elect to do so, will receive the cash proceeds
determined under the Sale Facility free of any brokerage costs or stamp duty.
To participate in the Sale Facility, Eligible Small Shareholders must make a valid election.
Eligible Small Shareholders that wish to participate in the Sale Facility should:21
• if they hold their BHP shares on the BHP Australian principal share register, submit their
Sale Facility election online at www.bhppetroleumsharefacility.com.au or return a physical
Sale Facility Election Form to BHP’s share registry by no later than 5:00pm on 24 May 2022
(AEST).22 A physical Sale Facility Election Form can be requested by contacting the
Shareholder Information Line on 1300 503 833 (within Australia) or +61 3 9415 4188
(international), Monday to Friday (excluding public holidays) between 8.30am to 7.30pm
(AEST); or
• if they hold their BHP DIs through the BHP CSN Facility, complete and return by post the
Sale Facility Form, that was despatched by post to their registered address, by no later than
1:00pm on 26 May 2022 (BST); or
• if they hold their BHP DIs in CREST, submit a Transfer to Escrow (TTE) instruction to settle
by no later than 1:00pm on 31 May 2022 (BST) for the number of BHP DIs for which the
dividend entitlement is to be sold. Further information for Eligible Small Shareholders wishing
to make an election to participate in the Sale Facility through CREST is set out in Appendix
2 of this announcement.
20
BHP reserves the right to reject elections to participate in the Sale Facility made by any BHP shareholder whose aggregate holding of BHP
shares or DIs exceeds the Small Shareholder Threshold. If a BHP shareholder holds one or more parcels of BHP shares or DIs as a trustee or
nominee for, or otherwise on account of, another person, that BHP shareholder may make separate elections in accordance with the election
process in respect of each of those parcels. In order to make separate elections, the trustee or nominee must establish distinct holdings by
5:00pm on 24 May (AEST) on the BHP Australian principal share register or by 6:00pm on 26 May (BST) on the BHP DI register in respect of each
parcel of BHP shares or DIs and must make a separate election in respect of each such parcel of BHP shares or DIs. However, the trustee or
nominee may not accept instructions from an underlying beneficiary to make an election unless it is in respect of all parcels of BHP shares held by
the trustee or nominee on behalf of that beneficiary, and the underlying beneficiary has confirmed to the trustee or nominee that its aggregated
beneficial and legal holding of BHP shares is less than the Small Shareholder Threshold.
21
If a BHP shareholder wishes to withdraw an election they have made to participate in the Sale Facility, they must contact the Shareholder
Information Line (see below) by no later than the cut-off date for submission of their election described above. Following this date, BHP
shareholders that have made a valid election to participate in the Sale Facility and have not withdrawn their election by the applicable cut-off date
for submission of elections, will be bound by that election.
22
BHP shareholders who become new BHP shareholders close to the cut-off date for submission of elections and who wish to participate in the
Sale Facility, will need to ensure that their shareholding has settled on the BHP Australian principal share register before they submit a Sale
Facility election and by no later than 5.00pm on 24 May 2022 (AEST).
8
How will the Sale Facility operate?
J.P. Morgan Securities Australia Limited or one of its affiliates (Sale Agent) will operate a Sale
Facility. 23
The Sale Agent will sell the Woodside Shares represented by the in specie dividend entitlement
of:
• Ineligible Overseas Shareholders; and
• Eligible Small Shareholders who have validly elected to have their in specie dividend
entitlement to Woodside Shares sold,
together with the aggregate of all Woodside Shares represented by the rounding treatment for
the in specie dividend (described above).
The Sale Agent will sell these Woodside Shares on licensed markets operated by ASX or Cboe,
unless BHP directs the Sale Agent to sell some or all of these Woodside Shares pursuant to a
bookbuild process. BHP will determine whether to conduct a bookbuild process for some or all
of the Woodside Shares subject to the Sale Facility, and the final price that shares will be sold
through a bookbuild process. The market price of Woodside Shares and/or the price that may
be realised from any bookbuild process is uncertain and subject to change from time to time.
Up to date information on the market price of Woodside Shares can be found at
www2.asx.com.au.
All proceeds realised from the sale of these Woodside Shares under the Sale Facility will be
pooled so that each BHP shareholder participating in the Sale Facility will be entitled to an
average price per Woodside Share sold. The amount of cash proceeds received by each BHP
shareholder participating in the Sale Facility may be more or less than the actual price that is
received by the Sale Agent for any specific Woodside Share sold. The proceeds under the Sale
Facility from the sale of the Woodside Shares represented by the rounding treatment for the in
specie dividend will be returned to BHP.
The proceeds determined under the Sale Facility will be remitted to BHP shareholders24, as
soon as practicable25 after completion of the last sale under the Sale Facility, in the currency
and the manner in which the Selling Shareholder is paid their BHP dividends, but, in the case
of dematerialised BHP shareholders on the South African branch share register, in South
African rand only.26
The proceeds from the Sale Facility will be remitted free of brokerage costs or stamp duty.
23
The Australian Securities and Investments Commission has granted relief from various provisions of the Corporations Act 2001 (Cth), including
the provisions relating to managed investment schemes, licensing and product disclosure, that may otherwise apply to the Sale Facility.
24
This payment will be made to BHP shareholders participating in the Sale Facility by BHP (through BHP’s share registry in Australia or the UK, or
their CSDP, as applicable) making a deposit into the bank account recorded with the BHP share registry or CSDP into which their BHP dividends
are paid. If a bank account is not recorded, the shareholder will be sent a cheque for the proceeds of sale by BHP (or the BHP share registry).
Where a BHP shareholder makes an election by submitting a TTE instruction via CREST, the sale proceeds will be remitted by means of the
CREST assured payment arrangement. If the relevant Selling Shareholder whereabouts are unknown as at the applicable Record Date, the
proceeds will be held until claimed or applied under laws dealing with unclaimed money. BHP Shareholders on the Australian principal share
register with a registered address in New Zealand and who do not have any payment instructions recorded on their shareholding, will also have
their sale proceeds paid into a separate bank account until valid New Zealand payment instructions have been provided to the BHP share registry.
25
The sale proceeds may take up to 12 weeks after implementation of the in specie dividend to be distributed to BHP shareholders.
26
The proceeds will be converted from Australian dollars to the relevant currency at the prevailing market exchange rate during the sale period.
9
What happens to South African resident BHP shareholders?
Woodside is not listed on the Johannesburg Stock Exchange (JSE). Due to the Exchange
Control Regulations 1961 of South Africa (SA Exchange Control Rules), South African
residents may be prevented from holding shares in foreign incorporated companies that do not
have a listing on the JSE.
As a result, each BHP shareholder that is a South African resident or holds the BHP shares
through BHP’s South African branch share register will be treated as an Ineligible Overseas
Shareholder, unless the South African shareholder has confirmed to BHP that they have
satisfied themselves that they are permitted to receive Woodside Shares or Woodside DIs (as
applicable) without breaching any applicable laws or regulations (including, without limitation,
the SA Exchange Control Rules) (Eligible SA Shareholder).
BHP shareholders:
• who are dematerialised holders of BHP shares registered on the South African branch share
register27 must communicate to their CSDP (in accordance with the process and time periods
agreed in their mandate with their CSDP) whether they wish to be nominated or not as an
Eligible SA Shareholder. CSDP’s must communicate that election to STRATE (Plc Nominees
Proprietary Limited) before 1.00pm, Thursday, 26 May 2022 (SAST). If the CSDP for any
reason fails to communicate any nomination by a dematerialised holder of BHP shares
registered on BHP’s South African branch share register to STRATE (Plc Nominees
Proprietary Limited) by this deadline, they will be deemed not to be an Eligible SA
Shareholder and will be considered an Ineligible Overseas Shareholder; or
• whose registered address in the BHP Australian principal share register on the applicable
Record Date is in South Africa, will be an Ineligible Overseas Shareholder, unless the
relevant shareholder nominates that they are an Eligible SA Shareholder by completing and
returning to the BHP share registry before 5:00pm on Tuesday, 24 May 2022 (AEST) the
South African Share Election Form. This form can be requested by contacting the telephone
numbers set out in the Shareholder Information Line section further below or by logging into
www.investorcentre.com/au;28 or
• whose registered address on the BHP DI register on the applicable Record Date is in South
Africa, will be an Ineligible Overseas Shareholder, unless the relevant BHP DI holder
nominates that they are an Eligible SA Shareholder by completing and returning to the BHP
share registry before 1:00pm on Tuesday, 31 May 2022 (BST) the South African Share
Election Form which can be requested by contacting the telephone numbers set out in the
Shareholder Information Line section further below.
By nominating as an Eligible SA Shareholder, the relevant BHP shareholder or BHP DI holder
is confirming that the BHP shareholder is:
• permitted to receive Woodside Shares if they hold BHP Shares on the Australian principal
share register or on the South African branch share register, or Woodside DIs if they hold
BHP DIs, under all applicable laws (including for the purposes of the SA Exchange Control
Rules); and
27
For example, this would include those BHP shareholders that have purchased their BHP shares on the JSE and not changed the manner in
which they hold their BHP shares.
28
BHP shareholders who become new BHP shareholders closer to the cut-off date for submission of elections and who wish to nominate that they
are an Eligible SA Shareholder, will need to ensure that their shareholding has settled on the BHP Australian principal share register before they
submit such an election, and by no later than 5.00pm on Tuesday, 24 May 2022 (AEST);
10
• requesting that Woodside Shares (registered on Woodside’s Australian principal share
register) or Woodside DIs (registered on Woodside’s DI register) be distributed to them.
BHP does not take any responsibility in connection with a BHP shareholder’s nomination to be
an Eligible SA Shareholder, and each BHP shareholder nominating as an Eligible SA
Shareholder must satisfy itself that they are permitted to receive Woodside Shares or
Woodside DIs, including by seeking the advice of professional and legal advisers.29
What are the tax outcomes of the in specie dividend?
The tax outcomes of the in specie dividend for BHP shareholders are outlined in Appendix 1.
It is recommended that shareholders seek their own specific taxation advice for their individual
circumstances.
How does BHP Petroleum’s balance sheet presented in the pro forma financial information in
Woodside’s explanatory memorandum compare to BHP’s held for sale disclosure in the half
year financial report?
The explanatory memorandum issued by Woodside today presents certain pro forma financial
information in relation to BHP Petroleum, including a balance sheet as at 31 December 2021.
The basis of preparation of this financial information differs, in certain respects, from the
presentation of BHP Petroleum as held for sale in BHP’s half year financial information for the
same period.
The main differences between BHP Petroleum’s balance sheet presented as part of
Woodside’s pro forma financial information contained in the Woodside explanatory
memorandum and BHP’s half year financial report are:
• inclusion of intercompany and cash balances that were excluded from the BHP Petroleum
net assets disclosed as ‘held for sale’ in BHP’s half year financial report;
• additional depreciation expense of approximately US$150 million, as depreciation has not
been recognised by the BHP Group from the point in time that BHP Petroleum was classified
as ‘held for sale’ following the signing of the SSA in November 2021; and
• recognition of a US$210 million impairment charge in the BHP Petroleum balance sheet in
the pro forma financial information for the combined group. This relates to the Ruby project
and reflects revisions to estimated reserves resulting from technical analysis of well drilling
results and performance following project completion in December 2021. This did not impact
BHP’s half year financial report as the Petroleum Assets were assessed in aggregate for
impairment testing purposes.
What happens to BHP employees who currently participate in equity incentive plans?
BHP currently operates a number of equity incentive plans, including:
• Short-term and long-term executive incentive plans, under which employees are granted
rights to BHP shares, subject to meeting defined performance and/or service conditions; and
29
Eligible SA Shareholders from the BHP South African branch share register who receive Woodside Shares on the Australian principal share
register and who wish to trade these on the ASX in Australia after completion, should verify if their current broking arrangements are suitable, and
if not engage a suitable Australian broker to trade on the ASX.
11
• Shareplus, an all-employee share plan, through which employees contribute funds after tax
to purchase BHP shares, and where they hold the purchased shares for a specified length
of time and satisfy an employment condition, they will receive an allocation of matched
shares at the end of the holding period.
If completion of the Merger occurs:
• Employees who continue to be employed by BHP will not receive the in specie dividend in
respect of any unvested equity award or matching entitlement, and the value of the
underlying BHP share to which they will receive on vesting will be reduced as a result of the
in specie dividend that has been determined. To treat BHP employees fairly and restore the
value of the unvested equity awards to their pre-completion value, BHP will grant those
employees with additional BHP equity awards on the same substantive terms as the original
unvested incentive awards or matching entitlements.
• Employees of BHP who will be employed by Woodside from completion and who are current
participants holding unvested awards in:
– Management Award Plan (MAP), BHP’s applicable long-term executive equity incentive
plan, will have all of their unvested equity awards lapse in full immediately prior to
completion (with the exception of MAP awards which were due to vest in August 2022,
which will have accelerated vesting applied). All unvested MAP awards which are lapsed
will be replaced by Woodside via the issuance of replacement rights under Woodside’s
equity incentive plans.
– Shareplus, will have matching of their acquired shares accelerated and they are expected
to receive their applicable matched BHP shares around the completion date.
How can I get more information?
If you have any additional questions in relation to this announcement, please call the
Shareholder Information Line on the numbers set out below.
Australian principal share register
• 1300 503 833 (within Australia) on weekdays between 8:30am and 7:30pm (AEST)
• +61 3 9415 4188 (international) on weekdays between 8:30am and 7:30pm (AEST)
UK DI register
• 0344 472 7001 (within the United Kingdom) on weekdays between 8:30am and 5:30pm
(BST)
• +44 344 472 7001 (international) on weekdays between 8:30am and 5:30pm (BST)
South African branch share register
• 086 110 0922 (within South Africa) on weekdays between 8:00am and 4:30pm (SAST)
• + 27 11 373 0033 (international) on weekdays between 8:00am and 4:30pm (SAST)
ADS Holders
• Citibank Shareholder Services toll free @ 1-877-248-4237 (‘877-CITI-ADR’) in the United
States on weekdays (excluding US holidays) between 08:30AM and 6:00 PM (EDT)
• Outside the United States on weekdays (excluding US holidays) @ 1-781-575-4555 between
08:30AM and 6:00PM (EDT).
12
Appendix 1: Tax outcomes for BHP shareholders
A summary of tax outcomes of the in specie dividend for certain BHP shareholders that are
tax resident in Australia, the United States (US), the United Kingdom (UK) or South Africa are
outlined below.
This summary is included for general information only and is not intended to be, nor should it
be construed to be, legal or tax advice. It does not take into account the individual
circumstances of any BHP shareholder and should not be relied upon by any BHP shareholder
or any other person. Each BHP shareholder should obtain, and only rely upon, their own
professional tax advice regarding the tax consequences of the in specie dividend and/or any
acquisition, holding or disposal of Woodside Shares.
Scope of tax summary
Taxing Scope
jurisdiction
Australia The Australian tax summary applies to BHP shareholders who:
• are residents of Australia for Australian income tax purposes or non-residents of Australia for
Australian income tax purposes who do not hold BHP shares, and will not hold Woodside
Shares, through a permanent establishment in Australia; and
• hold their BHP shares (and will hold their Woodside Shares) on capital account.
The summary below does not apply to BHP shareholders who:
• hold their BHP shares (or will hold their Woodside Shares) as revenue assets (which will
generally be the case for BHP shareholders who use their BHP shares (or will use their
Woodside Shares) in carrying on a business of share trading, banking or insurance) or as
trading stock, or have acquired BHP shares (or will acquire their Woodside Shares) for the
purpose of on-sale at a profit;
• acquired their BHP shares under any employee share scheme or where Woodside Shares will
be acquired pursuant to any employee share scheme;
• may be subject to special tax rules, including insurance companies, partnerships, tax exempt
organisations, trusts (except where expressly stated), superannuation funds (except where
expressly stated) or temporary residents; or
• are subject to the “taxation of financial arrangements” provisions in Division 230 of the Income
Tax Assessment Act 1997 (Cth). It is noted that Division 230 will generally not apply to the
financial arrangements of individuals, unless an election has been made for those rules to
apply.
The Australian taxation summary is based on the Australian tax law and administrative practice
as it applies at the date of this announcement. The comments do not take into account or
anticipate changes in Australian tax law, administrative practice or future judicial interpretations
of Australian tax law after this time. Future amendments to taxation legislation, or its
interpretation by the courts or the taxation authorities may take effect retrospectively and/or affect
the conclusions drawn.
BHP has applied to the Commissioner of Taxation (Commissioner) for a class ruling confirming
certain income tax implications of the implementation of the Merger for certain Eligible
Shareholders. It is expected that the final class ruling will be published by the Australian Taxation
Office (ATO) shortly after the implementation of the Merger.
The class ruling application is principally concerned with (i) confirming that demerger tax rollover
relief will not be available in respect of the in specie dividend (ii) confirming the Australian income
tax consequences of receiving the in specie dividend; and (iii) participating in the Sale Facility.
13
Taxing Scope
jurisdiction
United The US taxation summary is based upon the Internal Revenue Code of 1986, as amended (the
States Code), the regulations of the US Treasury Department and court and administrative rulings and
decisions in effect on the date of this announcement. These laws may change, possibly
retroactively, and any change could affect the continuing validity of this discussion.
This discussion applies only to BHP shares, BHP ADSs, Woodside Shares and Woodside ADSs
held as a “capital asset” for US federal income tax purposes (generally property held for
investment). The following does not purport to be a complete analysis of all potential tax effects
resulting from the in specie dividend or the ownership or disposition of Woodside Shares or
Woodside ADSs after the receipt of the in specie dividend, and does not address all aspects of
US federal income taxation that may be relevant to individual US Holders in light of their particular
circumstances. In addition, this summary does not address the Medicare tax on certain
investment income, information reporting and backup withholding requirements, US federal
estate or gift tax laws, any state, local, or non-US tax laws, any tax treaties, or any other tax
laws. Furthermore, this summary does not address all US federal income tax considerations that
may be relevant to certain categories of US Holders that may be subject to special treatment
under the US federal income tax laws. In addition, BHP believes that it will not be treated as a
Passive Foreign Investment Company (PFIC) in the taxable year of the in specie dividend or any
prior year, but because the determination of whether a foreign corporation is a PFIC is primarily
factual and there is little administrative or judicial authority on which to rely to make such a
determination, the United States Internal Revenue Service (IRS) might not agree that BHP is not
a PFIC. If it is determined that BHP is a PFIC, then adverse and burdensome US federal income
tax rules and consequences may apply to US Holders. The remainder of this discussion assumes
that BHP will not be treated as a PFIC in the taxable year of the in specie dividend or any prior
taxable year.
Further, to the extent any statements contained herein relate to Woodside, Woodside Shares or
ADSs or the US federal income tax consequences of holding and disposing of Woodside Shares
or ADSs, such statements are based upon BHP’s understanding of Woodside’s disclosure of
such consequences in its public disclosure statements.
This discussion is limited to the US federal income tax consequences of a US Holder, which is
used to mean, with respect to BHP or Woodside, respectively, a beneficial owner of shares or
ADSs that, for US federal income tax purposes, is:
• an individual who is a citizen or resident of the United States;
• a corporation (or other entity treated as a corporation for US federal income tax purposes)
created or organized in or under the laws of the United States, any state thereof or the District
of Columbia;
• an estate the income of which is subject to US federal income tax regardless of its source; or
• a trust (A) the administration of which is subject to the primary supervision of a US court and
which has one or more “United States persons” (within the meaning of Section 7701(a)(30) of
the Code) who have the authority to control all substantial decisions of the trust or (B) that has
made a valid election under applicable US Treasury regulations to be treated as a United
States person.
United The UK taxation summary applies to BHP shareholders who are: (i) resident (and in the case of
Kingdom individuals, domiciled) for tax purposes in, and only in, the UK (and to whom split-year treatment
does not apply); (ii) who are absolute beneficial owners of their BHP shares and Woodside
Shares and (iii) who hold their BHP shares as an investment (otherwise than through an
individual savings account or a pension arrangement).
This outline does not deal with certain types of BHP shareholders including pension funds,
charities, dealers in securities, insurance companies, collective investment schemes, persons
who have or could be treated for tax purposes as having acquired their BHP shares or Woodside
Shares by reason of their employment or as carried interest, and persons subject to UK tax on
a remittance basis.
South Africa The South African taxation summary applies to BHP shareholders that are South African tax
resident shareholders who hold their BHP shares (and will hold their Woodside Shares) on
capital account. It does not deal with other types of shareholders such as shareholders that have,
or could be treated for tax purposes as having, acquired their BHP shares by reason of their
employment.
This taxation summary is based on the South African Income Tax Act, 58 of 1962 (SA Tax Act)
as it applies at the date of this announcement.
14
Tax outcomes from the receipt of in specie dividend:
Taxing Tax outcomes
jurisdiction
Australia Australian resident shareholders
On the basis that demerger tax roll-over relief does not apply, the in specie dividend will have no
impact on the existing cost base of your BHP shares.
You should include the amount of the in specie dividend in your assessable income in the income
year in which you receive the in specie dividend.
BHP intends to fully frank the in specie dividend and, accordingly it will be accompanied with
franking credits.
The tax treatment of these franking credits to you will depend on (i) the satisfaction of the
qualified person rule (otherwise known as the "45 day rule") and (ii) whether you are entitled to
a refund where the tax offset referable to the franking credits attached to the in specie dividend
exceeds the tax payable on the in specie dividend).
Generally, provided you are a “qualified person” in relation to the in specie dividend, you:
• should also include the amount of the franking credits attached to the in specie dividend in
your assessable income in the income year in which you receive the in specie dividend; and
• should qualify for a tax offset equal to the amount of the franking credits attached to the in
specie dividend, which can be applied against your income tax liability for the relevant income
year.
You should be a “qualified person” in relation to the in specie dividend if the “holding period rule”
and the “related payments rule” are satisfied.
Generally:
• to satisfy the “holding period rule”, you must have held your BHP shares “at risk” for at least
45 days (not including the days of acquisition and disposal) within the qualification period
(which begins on the day after the day on which they are acquired and ends on the 45th day
after they become ex-dividend). This means that once you satisfy the "holding period rule" in
relation to a distribution on your BHP shares you do not need to satisfy it again in relation to
those BHP shares for subsequent distributions, unless you make a "related payment" (refer
below); and
• under the “related payments rule”, if you are obliged to make a “related payment” (essentially
a payment passing on the benefit of the in specie dividend) in respect of the in specie dividend,
you must hold your BHP shares “at risk” for at least 45 days (not including the days of
acquisition and disposal) within the period beginning 45 days before, and ending 45 days after,
they become ex-dividend.
To be held “at risk”, in broad terms, you must retain 30% or more of the risks and benefits
associated with holding your BHP shares. Where you undertake risk management strategies in
relation to your BHP shares (e.g. by the use of limited recourse loans, entering into put or call
options in relation to your BHP shares or other derivatives), your ability to satisfy the “at risk”
requirement and thus to be a “qualified person” may be affected.
If you are an individual, you are automatically treated as a “qualified person” for these purposes
if the total amount of the tax offsets in respect of all franked amounts to which you are entitled in
an income year does not exceed A$5,000. This is referred to as the “small shareholder rule”.
However, you will not be a “qualified person” under the small shareholder rule if “related
payments” have been made, or will be made, in respect of these amounts.
If you are an individual or complying superannuation fund, you may be able to receive a cash
tax refund from the ATO if the tax offset equal to the franking credits attached to the in specie
dividend exceeds the tax payable on your total taxable income.
If you are a company the franking credits attached to the in specie dividend will generally give
rise to a franking credit in your franking account however, in certain circumstances you may have
excess franking credits. You will not be entitled to a tax refund of any excess franking credits.
Rather, the surplus franking credits may be converted to a tax loss which can be carried forward
to future years (subject to you satisfying certain loss carry forward rules).
No GST or Australian stamp duty should be payable ...
