MCY Mercury NZ ( MRP Mighty River Power)

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Originally Posted by CJ

It is an onmarket buy back so only from the Market, not the government I would have thought. Even if the Govt did sell, there is a market price.

I wonder what will happen if the Govt creaps up to say 55% due to the buy backs - will it offload onto the market or hold shoudl there be a future capital raising so that they can be diluted back down to 51%?

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Only 2% (25m shares) of the shares are been bought back, so would move the govt from 51% to just over 52% on a pro rata basis.

If they only buy back 24 of the 25m Govt holding would be 51.9966%, they would not even have to file an SSH notice.

Yes but if they did 1% per year ...

I actually thought the 2% referred to the full shareholding, not just the non govt shareholding. Unlikely they will buy the full 25m as they have only allcoated $50m - I assume they wont let it drop to $2 per share before buying.

Forgive me but why not repay debt? Call me old fashioned but paying off debt is always number one in my business dealings.

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Originally Posted by Winston001

Forgive me but why not repay debt? Call me old fashioned but paying off debt is always number one in my business dealings.

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Repaying debt is not 'capital management' winston

Sometimes !capital management! Even goes as far borrowing more and buying back shares at the Sam time ....at least MRP not doing that

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Originally Posted by CJ

Its the first home buyers I feel sorry for!

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That's why i'm here. Can't sump the deposit on the house. Now i'm reading this forum and buying shares. Not a bad outcome when SML is involved.

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Originally Posted by Winston001

Forgive me but why not repay debt? Call me old fashioned but paying off debt is always number one in my business dealings.

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because debt is cheap at the moment so a much better return by buying shares.

If the company has more money than it knows what to do with, then as a shareholder, I'd rather that they just gave it to me. I like money, and I'll gladly take it off their hands.

A share buyback means that someone else gets the money, and that I can only get some money if I sell my shares. That seems perverse to me.

Ask all those Blackberry shareholders. . .

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Originally Posted by surfersteve

the buy back is a very goooooood! idea as the company is cheap as chips as one broker put it recently.....

and the market now has had a chance to pick up a lot of share cheap....

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If you say so, but I'd still rather have the money than a paper profit. . .

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Originally Posted by winner69

Not really Air NZ cash that $1b .... most of it prepaid travel .... still have to spend a lot of that cash to fly the travellers to wherever

Zonks ago AIR raved about that $1b we have in the bank ... we wont go broke and all that stuff .... then the govt bailed them out eh

Ah so --- does AIR make most of its money from investing all this money then?

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Things could turn for AIR without a doubt, but as a company it is in the strongest shape it has been for a long time and especially so compared to other airlines. AIR are buying back their shares as well as investing in new more efficient equipment to lower overheads while simultaneously allowing them to expand into new markets.

But regardless of this, the point is that any cash that cannot be spent by the company effectively to is being ploughed back to the shareholders via a buyback which makes perfect sense. We now have Labour claiming (as per the TV3 news tonight) that MRP are taking a further $50m from the pockets of taxpayers to try and increase the SP back to its listing price and intimated that they are doing so at the behest of the Government. What a load of bollocks.

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Originally Posted by Zaphod

Things could turn for AIR without a doubt, but as a company it is in the strongest shape it has been for a long time and especially so compared to other airlines. AIR are buying back their shares as well as investing in new more efficient equipment to lower overheads while simultaneously allowing them to expand into new markets.

But regardless of this, the point is that any cash that cannot be spent by the company effectively to is being ploughed back to the shareholders via a buyback which makes perfect sense. We now have Labour claiming (as per the TV3 news tonight) that MRP are taking a further $50m from the pockets of taxpayers to try and increase the SP back to its listing price and intimated that they are doing so at the behest of the Government. What a load of bollocks.

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Seems Labour and Green speakers don't have the basic knowledge about the stock market, or just simply against anything related to National.

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Originally Posted by Master98

Seems Labour and Green speakers don't have the basic knowledge about the stock market, or just simply against anything related to National.

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Yes, it's politics. Labour/Greens have done everything possible to sabotage this float, which has lessened the price the taxpayer receives. That includes Parker completely discarding his analysis of electricity retailing and going along with their nonsense proposal purely in pursuit of power. They are quite delighted that they have managed to destroy the value of the power companies. Frightening stuff.

I think anyone who thinks that this buyback by MRP is not politically motivated and driven and timed is very naïve.
Who appoints the board ? The shareholders. Who was the only shareholder when the current board were appointed ? The government.
They will do anything they can to try to support the Meridian float. And they need to....to get the best return for the crown.

What a money go round.

Disc. Hold MRP, wavering on whether to purchase Meridian or not.

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Originally Posted by surfersteve

"Hold MRP, wavering on whether to purchase Meridian or not."

if the share price is cheap why not buy it back

yes its probably been discussed with the major shareholder but its hardly anything but good balance sheet management and provides support for all shareholders and future shareholders

MRP is a good long term hold and at 2.17 it was the time to buy

becuase its under priced so good on them

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I agree whole-heartedly.
This is an excellent signal to buy more.
MRP have timed this well, knowing that a lot of short-term-thinking people/institutions will likely be selling MRP to go for Meridian thus dropping the price further (now counteracted my MRP actively scooping them up).
MRP's board know so much more than anybody else regarding their own Company's future.
If the board believes the Company's share price and true value is $2.75/share now (as the institutions do) and $3.00/share in 6 months after positive announements, then buying around $2.20 gives an 80c/share return over 6 months = 74%/annum ROI. Far better return than repaying debt.

If enough people sell MRP to buy Meridian, you might find MRP complete this buy-back in less than a month... and then they'll announce another one.
Also, I get to increase my %age ownership of MRP and my dividend by 2%, for free.

Peter Lynch (One up on Wall Street) is a big fan of share buybacks, which I agree with on the whole.

The funds used are excess cash?? but what I'm not quite sure on is what is meant by being held as Treasury Stock, does this mean for example there were 100 shares in total, they buy back 10 to be held in Treasury Stock, does this not mean that there is still 100 shares and therefore the value is still the same, so how has "you and me " as shareholders gained anything . I must be missing something - probably are :-)


Disc: Not a holder at present - made a small profit on the ipo though.

All this talk of government/board conspiracy reminds me of the old, now non-pc saying about N's and woodpiles. I'm not sure that there's a woodpile here, let alone an n! Just good balance sheet management and a bit of fortuitous timing!

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The funds used are excess cash?? but what I'm not quite sure on is what is meant by being held as Treasury Stock, does this mean for example there were 100 shares in total, they buy back 10 to be held in Treasury Stock, does this not mean that there is still 100 shares and therefore the value is still the same, so how has "you and me " as shareholders gained anything . I must be missing something - probably are :-)

QUOTE=Jay;432118]Peter Lynch (One up on Wall Street) is a big fan of share buybacks, which I agree with on the whole.

It has the same status as "nominal" capital used to have in the days when companies had a nominal, as distinct to actual, issued capital. No effect until it is re-issued for cash or other consideration. Meanwhile, shareholders benefit from proportionately bigger shares of the pie!

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Originally Posted by Jay

but what I'm not quite sure on is what is meant by being held as Treasury Stock, does this mean for example there were 100 shares in total, they buy back 10 to be held in Treasury Stock, does this not mean that there is still 100 shares and therefore the value is still the same, so how has "you and me " as shareholders gained anything . I must be missing something - probably are :-)

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A company can hold upto 5% of its shares as treasury stock. If it buys more than that, it must cancel them.

The shares lose all their rights while held as treasury stock so no dividends or voting etc so that is why you benefit.

The benefit to the company in holding treasury stock is they can sell them again easily without needing to do reissue/capital raising, as would be the case if they cancelled the shares.

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Originally Posted by CJ

A company can hold upto 5% of its shares as treasury stock. If it buys more than that, it must cancel them.

The shares lose all their rights while held as treasury stock so no dividends or voting etc so that is why you benefit.

The benefit to the company in holding treasury stock is they can sell them again easily without needing to do reissue/capital raising, as would be the case if they cancelled the shares.

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clear as mud! cheers

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Originally Posted by CJ

A company can hold upto 5% of its shares as treasury stock. If it buys more than that, it must cancel them.

The shares lose all their rights while held as treasury stock so no dividends or voting etc so that is why you benefit.

The benefit to the company in holding treasury stock is they can sell them again easily without needing to do reissue/capital raising, as would be the case if they cancelled the shares.

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Thanks for that CJ. Something I was not aware of. That makes sense and easy understanding.

Yes ditto to what balckcap said Thanks CJ