Building society IMB Ltd has launched the first of a series of buybacks designed to cancel its ordinary shares. In its initial buyback it plans to buy back $14 million of shares through an off-market tender.Under the tender process, announced yesterday, eligible shareholders may tender some or all of their shares for sale at discounts of between five and 10 per cent of the volume-weighted average price of IMB shares over the 10 trading days prior to July 31.In May, IMB announced that it had accepted the recommendation of a structural review that it should overhaul its capital structure. IMB has a hybrid structure; it is a mutual approved deposit-taking institution and also a public company limited by guarantee and shares. The shares are traded on an exempt market operated by IMB.It has 39.9 million shares on issue and 4,200 shareholder members among its 180,000 members.Consultants who conducted the review found that: "The ordinary shares do not sit comfortably with the mutual structure and present challenges for IMB's board in balancing the expectations of guarantee members and shareholder members." The IMB board had identified mergers with other mutual ADIs as a key strategy for growth.The consultants' view was that the ordinary shares had become an expensive form of capital for IMB because of the level of dividend payments. They also stand in the way of the group taking up merger opportunities. IMB would not be able to buy back all of its shares at once because of capital constraints, so the consultants recommended a series of buybacks.The buyback is expected to be made up of a capital component of $1.18 a share, with the balance being a fully franked dividend.IMB shares traded at $3.15 yesterday. The shares traded at $3.74 prior to the May announcements and have fallen as low as $2.80 since then.