Bridgestone Australia directors have announced an AUD$50 million (£20 million) buyback of the minority of shares not already owned by Bridgestone Corporation. If shareholders approve the transaction, Bridgestone Australia will become a wholly owned subsidiary of the parent company.
Bridgestone Australia listed muted profits in 2006 as rising raw material prices bit into profit margins and competition from Chinese and other overseas sources of tyres became more intense. The company’s first-half year profits were AUD$3.26 million (£1.3 million), down just over fifty per cent on the same time the previous year.
The 14.5 million shareholders that make up Bridgestone Australia’s 39.7 per cent shareholding not owned by Bridgestone Corporation have been offered AUD$3.40 (£1.36) a share, comprised of a fifty cent return of capital and a fully franked dividend of AUD$2.90 (£1.16). Following this announcement shares in Bridgestone Australia jumped 49.45 per cent to AUD$4.11 (£1.65).
According to a timetable set out by Bridgestone Australia, the minority shares will be purchased and cancelled by May 2007.
