The JB Hi-Fi Limited (ASX: JBH) share price is slumping amid the completion of the company's off-market buyback.
Following strong demand, the buyback – worth $250 million – will be scaled back to only include shares tendered at a discount of at least 14%.
At the time of writing, the JB Hi-Fi share price is $51.15, 1.06% lower than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.15% while the electronics retailer's sector – the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) – has slipped 0.67%.
Let's take a closer look at the non-price sensitive news released by JB Hi-Fi on Monday.
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JB Hi-Fi completes off-market buyback
The JB Hi-Fi share price is in the red this morning. Its fall comes after the company announced the scaling back of its off-market buyback following strong demand.
The electronics retailer will repurchase 5.5 million of its shares back from investors – representing 4.8% of its issued shares.
The market price for the buyback was set at around $52.38 at Friday's close. That means – at a 14% discount – JB Hi-Fi will pay $45.05 for each share bought through the offer.
All successful tenders will be scaled back. Involved shareholders will see 100 shares bought back through a priority allocation before an 88.5% scale back is applied.
As a result, successful shareholders will have 11.5% of the shares they tendered – beyond their priority allocation – bought back.
Though, shareholders who tendered their entire holding at a 14% discount and who would be left with 40 shares or fewer will have all their shares bought back.
JB Hi-Fi also stated the Australian Tax Office is expected to allow $41.87 of the buyback price to be treated as a fully-franked dividend.
The sale consideration of each share would, therefore, be $7.20 for capital gains tax purposes. That meets the shares' tax market value of $49.07.
Cash from the sale of involved investors' stock is expected to be sent out to shareholders on 20 April.
JB Hi-Fi share price snapshot
So far, 2022 has been good for the JB Hi-Fi share price.
It has gained 4.8% since the start of the year. Though, it's fallen 1.9% over the last 12 months.
