Originally Posted by
BlackPeter
Hi dodgy,
I have no comprehensive overview of which companies are doing share buybacks and what happens with the company afterwards, but here are some examples from recent memory where the method seemed to have had good consequences for share holders:
IFT - actually, an interesting one - the SP even dropped short term, but look where they are now!
NPX - buying back for a long time ... and so far it certainly brought the SP up
CVT - admittedly still fresh, but shareholders for sure must like where the SP is going ...
TEM - maybe not quite comparable (its an investment fund), but overall do I think that the ongoing buyback there is as well in the best interest of the share holders.
So - I don't think that there is anything wrong with share buybacks in itself ... it certainly increases the EPS - and if the company does not know a better way to invest their funds, than it might be better for the directors to admit that and buy back, than just splashing the money into less profitable ventures. Sure - they can as well declare a dividend, given however that NZO has at current no imputation credits to distribute would this be from a tax perspective suboptimal.
What annoys me with the proposed NZO buyback is just that ZETA would creep towards control without paying a premium for that, and I certainly don't see how they would have the best interest of other shareholders at their mind.
Discl: holding (a wee parcel) and intend to vote against the buyback unless they offer an option which does not increases Zetas voting power.