by Chris Becker
Looks like a torrent will be unleashed this morning on the ASX open as Woodside emerges from yesterdays trading halt.
From IGs Chris Weston:
Woodside (WPL) comes back online today after yesterday’s big news that Shell was selling out of the majority of its stake. The removal of the overhang will be welcomed by the market, who will also like the controlled manner by which the sell-down takes place.
There had been some concerns that if WPL was to buy-back Shell’s stake, it may have to over-gear or even sell certain assets to achieve this, so the fact it is using cash and existing debt facilities, while maintaining its 80% payout ratio is a win for shareholders.
What’s more, the buyback increases return on equity and is 6% EPS accretive. The buy-back still needs 75% shareholder support, which should get over the line, although there will be some objection to Shell’s access to WPL’s franking credits.
WPL share price has had a brilliant year after finally breaking out of its range and then blowing out the cobwebs in mid-April on the back of higher energy prices.
A stand out amongst the beleagured materials sector, this should be a doozy this morning as sentiment moves into the manic “Don’t miss out” phase!
The former April 2011 high at $47 is the target, but will probably require more torque from higher price action in WTI and other energy prices:
