The BHP Billiton Limited (ASX: BHP) share price rose 5.5% on Thursday after the mining giant announced a US$10.4 billion buy-back and special dividend.
BHP is one of the world’s largest resource businesses, it produces iron, coal, petroleum and copper.
The BHP buy-back and dividend
In an announcement, management said they intend to start a US$5.2 billion share buy-back immediately and can buy shares at up to a 14% discount.
BHP will also pay a special dividend after the buy-back has been completed, which will be the balance of the net proceeds from the sale of its Onshore US assets.
For Australians, BHP said that the buy-back will comprise a $0.38 capital component and a fully franked dividend equal to the buy-back price less $0.38 per share.
BHP CEO Andrew Mackenzie said: “We made a commitment that all the net proceeds from the disposal of our Onshore US assets would be returned to shareholders and we are honouring that commitment now that the sale transactions have been completed.”
After this shareholder return program, BHP will have returned US$21 billion to shareholders over the past two years.
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