Clover’s $3.26M Share Buyback Targets Employee Plan Dilution

Clover’s Strategic Move to Manage Shareholder Dilution

Clover Corporation Limited (ASX, CLV), a key player in nutritional oil microencapsulation technology, has announced a measured on-market acquisition of up to 3.26 million shares. This move is designed to satisfy future obligations under its Employee Share Plan (ESP), which historically has led to shareholder dilution through the issuance of new shares upon vesting of performance rights.

The buyback, approved by shareholders at the company’s 2025 Annual General Meeting, represents nearly 2% of the company’s issued capital. By acquiring shares on-market rather than issuing new ones, Clover aims to better align employee incentives with shareholder interests and protect existing investors from dilution.

Details of the Employee Share Plan and Vesting Schedule

The shares will be acquired by CPU Share Plans Pty Ltd, acting as trustee for the Clover Employee Share Plan Trust. The acquisition covers performance rights granted over three years, 426,801 rights from 2024 vesting in July 2026, 1,433,706 rights from 2025 vesting in July 2027, and 1,403,660 rights from 2026 vesting in July 2028. All vesting remains contingent on meeting previously disclosed performance conditions.

Purchases will be conducted over a period of up to 24 months, with share prices capped at no more than 5% above the volume weighted average price (VWAP) of the preceding 10 trading days. This disciplined approach ensures the buyback is executed responsibly, respecting market integrity and regulatory requirements.

Regulatory Compliance and Market Impact

Clover has committed to full compliance with the Corporations Act and ASX listing rules, including timely disclosures and adherence to its Securities Trading Policy. The company will notify the market before commencing and upon ceasing purchases, maintaining transparency throughout the process.

This buyback program signals Clover’s proactive stance on managing capital structure and shareholder value. By offsetting dilution from employee incentives, Clover is positioning itself to maintain earnings per share stability and investor confidence as it continues to innovate in the consumer staples sector.