On Tuesday the great buy back begins....how very exciting. Strap yourselves in for a nice rise.
MAp will commence the buyback initially with intent to buy on market upto $200m worth of stock....which they have capped upto 80m shares. This is an interim action until managment secure shareholder approval for the actual and official buyback (the main game) which can only be approved by shareholder vote at the AGM in October.
Once approved, MAp will commence the buyback with intent to spend $1b in an effort to get the security price close to NTA $4.59.
Market cap is currently $5b, and we are going to see $1b used to buy up shares in the market.....this is HUGE. Remember, not all shareholders are sellers, and so as the price climbs, more will be enticed to sell...but there are still alot of holders like myself who will NOT sell no matter what price the stock gets to. (perhaps at $6 I will let some go.) Thus the price should see a substantial rerating.
It is not as simple as saying, we are buying back 20% of the shares on issue, thus will see a 20% price rise. As the shares bought back, will then be cancelled....thus meaning the shares remaining, will receive a higher distribution amount (less owners of the business to distribute profit between.)
So as I have been saying for the last 2 weeks...we are about to see a massive rerating. Show me many other stocks that have $1b to spend to buy back shares.
Disclaimer: My calculations are often wrong so please do not rely on my numbers....and I have had one too many glasses of red tonight.
Kiril.
I hold.
MAP Price at posting:
$2.90 Sentiment: Buy Disclosure: Held
