Edit: I suppose we will have to see how the ATO rules on this capital return. I would hope that if it isn't ruled as a non-taxable event, management do not follow the dividend route for the reasons I have listed below.

I'm not really not sure how to feel about this special dividend. If it isn't fully-franked, by my calculations it will result in ~11% of my capital being given to the ATO.

Pre-dividend: 100 x $0.45 = $45.

Dividend: 100 x $0.16 = $16.

Ex-dividend: 100 x $0.29 = $29. 

At a tax rate of 32.5% on $16 I would pay $5.12 tax.

Total: $29 in shares, $10.88 in cash, combining to $39.88.

Doesn't really seem to be in the shareholders best interests...

Unless there's something glaringly obvious I am missing here?