RE:RE:RE:RE:RE:Detailed Scenario Analysis on SIB Price RangeJust to be clear, they are not buying back in the open market. Its impossible to buy back $300 million worth of shares in the open market especially with such low trading volume and subtantial amount (effectively buying back 15-20% of all shares outstanding)
WBuffett1 wrote: The $300 million is a Substantial Issuer Bid (SIB). NCIB is coming afterwards.
An SIB is basically a tender offer to all existing shareholders. They will announce the terms and a price on Monday. There are a couple ways they can do this. My guess is they will do a modified dutch auction, meaning they will announce a price range and existing shareholders can submit how many shares they will sell at what price level. After gathering all those information, they will determine a set price and will buyback $300 million worth of shares.
Stooge wrote: riverrrow wrote: Personally I think Buffett will tender some if not all of his shares. It's a great way/opportunity to cash in some profit. He can spin it like he's doing the company a favour. If more than $300 million worth of shares is tendered the buyback will be prorated for each shareholder tendering. GLTA.
There seems to be a misunderstanding about the announced buy back. Perhaps I misunderstand so ...
The announcement is required notice that HCG may buy back its own shares on the open market. They might not buy any but they have sent a signal that the price was too low. No-one tenders shares like with a buyout. HCG will just have their broker go into the market, from time to time, to buy up some chares which are then cancelled leaving fewer outstanding.
A normal course issuer bid is a way of returning excess capital back to shareholders. As you can see we have already improved our capital gain before a single share has been bought back.